Figure 11-19 -In the Short Run, the Monopolist Depicted in Figure 11-19

question 13

Multiple Choice

Figure 11-19
-In the short run, the monopolist depicted in Figure 11-19 should

• A) shut down because P < AVC at some output levels.
• B) shut down because P < ATC at all output levels.
• C) continue producing because P > AVC at some output levels.
• D) continue producing because P > ATC at all output levels.
• E) continue producing because monopolists never shut down.

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Definitions:

Variable Costs

Expenses that change in proportion to the activity of a business, such as materials and labor costs that vary with production volume.

Operating Income

Earnings from a company's core business operations, excluding expenses and revenues that are unrelated to the primary activities.

Unit Selling Price

The cost for one unit of a product when it is sold.

Unit Variable Costs

Costs that vary directly with the volume of production or sales, such as materials and labor, on a per-unit basis.