In the Short Run,a Monopoly Should Shut Down Whenever

question 50

Multiple Choice

In the short run,a monopoly should shut down whenever

• A)marginal revenue exceeds marginal cost
• B)price is less than average total cost
• C)total revenue is less than total cost
• D)price exceeds the ratio of marginal cost to average cost at the optimal output
• E)price is less than average variable cost everywhere

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Definitions:

Conversion Costs

The combined costs of direct labor and manufacturing overheads incurred to convert raw materials into finished goods.

Direct Materials

Primary elements that are directly involved in the production process of particular products or services.

Equivalent Units

A method used in cost accounting to express partially completed goods in terms of complete units.

Units Finished

The quantity of completed products available for sale or distribution at the end of an accounting period.