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Suppose That at an Output of 1, 000 Units, a Monopolist

Question 143

Multiple Choice

Suppose that at an output of 1, 000 units, a monopolist has marginal cost of $40, marginal revenue of $30, average variable cost of $30, and average total cost of $50.In order to maximize profit or minimize loss in the short run, the firm should


A) shut down
B) continue to produce 1, 000 units
C) produce fewer than 1, 000 units but still operate
D) produce more than 1, 000 units
E) increase its plant size to gain economies of scale

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