If a monopoly's total revenue is less than its variable cost, it should shut- down in order to minimize its loss.

Question

Quizplus · Accepted Answer

If a monopoly's total revenue is less than its variable cost, it means that the total cost is greater than the total revenue. In this case, the firm should shut down in the short-run to minimize its losses. However, in the long-run, the firm may need to exit the market if it cannot cover its fixed costs as well.

If a Monopoly's Total Revenue Is Less Than Its Variable