When a Monopolist Incurs a Loss in the Short Run

question 391

Multiple Choice

When a monopolist incurs a loss in the short run, it will stop producing if

• A) demand is greater than marginal revenue.
• B) marginal cost equals marginal revenue.
• C) total revenue is insufficient to cover variable costs.
• D) total revenue is insufficient to cover fixed costs.

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Definitions:

Technology Improvement

Enhancements or innovations in technology that increase productivity, efficiency, and product quality in various sectors.

Economy

The system of production, consumption, and distribution of goods and services in a particular geographic region or country.

Production Possibility Frontier

A chart representing the ultimate production possibilities of two items, given certain inputs and the current state of technology.

Unemployment

A situation in which individuals who are capable of working and are actively seeking work are unable to find employment.