In the Short Run, a Monopolist Will Shut Down When

question 199

Multiple Choice

In the short run, a monopolist will shut down when

• A)average total cost is greater than price at all output levels
• B)average variable cost is greater than average fixed cost at all output levels
• C)price is greater than average variable cost at all output levels
• D)average fixed cost is greater than price at all output levels
• E)average variable cost is greater than price at all output levels

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Definitions:

Negatively Correlated

Refers to two variables which move in opposite directions; when one variable increases, the other decreases, and vice versa.

Variables

Elements, features, or factors that are likely to vary or change and can be measured, controlled, or manipulated in experiments or models.

Opposite Directions

Refers to two lines or paths that diverge from each other, heading in completely different trajectories.

Positive Correlation

A relationship between two variables where if one variable increases, the other one also increases or if one decreases, the other also decreases.