A Monopolist Should Shut Down in the Short Run If

question 132

Multiple Choice

A monopolist should shut down in the short run if

• A)price is less than average variable cost
• B)price is greater than average total cost
• C)marginal revenue equals marginal cost
• D)marginal revenue is less than marginal cost
• E)price exceeds average fixed cost

---

Definitions:

Conversion Ratio

The number of shares a bondholder can receive upon converting their bonds into equity shares.

Call Option

A finance-related contract granting the buyer the privilege, rather than a requirement, to buy an asset at a fixed price within a set period.

Risk-Free Bond

A debt security that is assumed to have no risk of default, typically issued by a government with a stable financial outlook, allowing investors to predict with a high degree of confidence their return on investment.