The Table Given Below Shows the Price, Marginal Revenue and Marginal

question 69

Multiple Choice

The table given below shows the price, marginal revenue and marginal cost of a monopolist at different levels of the output. The firm does not incur a fixed cost of production.Table 11.4

-If the monopolist's price happens to be greater than the average-variable cost but less than the average total cost, in the short run the monopolist will:

• A)be forced to shut down to minimize the cost.
• B)operate at a loss.
• C)operate at an economic profit.
• D)operate at a normal profit.
• E)go out of business.

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Definitions:

Labor Rate Variance

The difference between the expected cost of labor at standard rates and the actual cost of labor incurred.

Raw Materials Quantity Variance

The difference between the expected amount of raw materials required for production and the actual amount used, evaluated in terms of cost.

Labor Rate Variance

The difference between the actual cost of direct labor and the expected (or standard) cost, based on the standard hours worked and standard labor rate.

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the expected variable overhead based on standard cost.