A monopolist will operate in the short run if which of the following is above average variable cost?
A) Marginal cost.
B) Marginal revenue.
C) Price.
D) All of these.

Question

Quizplus · Accepted Answer

In the short run, a monopolist will operate if the price is above average variable cost. This allows the monopolist to cover its variable costs and make a profit, even if it is not covering all of its fixed costs. Marginal cost and marginal revenue are important considerations for the monopolist in determining its profit-maximizing level of output, but they do not determine whether the monopolist will operate in the short run.

A Monopolist Will Operate in the Short Run If Which