When a monopolist incurs a loss in the short run, it will stop producing if
A) demand is greater than marginal revenue.
B) marginal cost equals marginal revenue.
C) total revenue is insufficient to cover variable costs.
D) total revenue is insufficient to cover fixed costs.

Question

Quizplus · Accepted Answer

A monopolist will stop producing in the short run if total revenue is insufficient to cover variable costs, as continuing production would increase the loss beyond the fixed costs, which must be paid regardless of production levels.

When a Monopolist Incurs a Loss in the Short Run