At the Level of Output Where the Marginal Cost and Marginal

question 106

Multiple Choice

At the level of output where the marginal cost and marginal revenue curves intersect, a monopolist's demand curve passes above its average total cost curve. The firm will:

• A) be able to make a positive economic profit.
• B) stay in operation in the short run, but then shut down.
• C) shut down in the short run.
• D) increase its price.