A Monopoly Will Shut Down in the Short Run When

question 23

Multiple Choice

A monopoly will shut down in the short run when

• A)the average variable cost curve is above the demand curve.
• B)the marginal cost curve is above the demand curve.
• C)the average total cost curve is above the demand curve.
• D)the marginal revenue curve is horizontal.
• E)marginal cost is negative.

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Definitions:

Buyers

Individuals or organizations that purchase goods or services for personal use, consumption, or to use in the production of other goods and services.

Sellers

Persons or organizations that provide products or services for purchase in the marketplace.

Levied

The act of imposing a tax, fee, or fine by an authority.

Demand Curve

A graphical representation showing the relationship between the price of a good and the quantity demanded by consumers.