In a Monopoly, If Price Is Greater Than Average Variable

question 58

Multiple Choice

In a monopoly, if price is greater than average variable cost but less than short-run average cost, then:

• A) the monopoly will be operating at a loss.
• B) the monopoly will be operating at a profit.
• C) the monopoly is in a shut down situation.
• D) its operating loss is greater than total fixed cost.
• E) its total revenue will be greater than total cost.

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Definitions:

Drawer

In accounting, the entity (person or organization) that issues or writes a bill of exchange, check, or draft, instructing another entity to pay.

Drawee

Bank that drawer has an account with.

Credits Account

A financial record that boosts a liability or equity account, or lowers an asset or expense account.

Drawee

The party in a bill of exchange who is directed to pay the specified amount, typically a bank.