When would a monopolist shut down in the short run?
A) if price is less than marginal revenue
B) if total revenue is less than total variable cost
C) if price exceeds marginal revenue
D) if price is less than average total cost

Question

Quizplus · Accepted Answer

In the short run, a monopolist would shut down if its total revenue is less than the total variable cost. This is because it would be better for the monopolist to stop its production and avoid incurring any additional costs. If it continues to operate, its losses would increase. The other options listed are not relevant reasons for a monopolist to shut down in the short run.

When Would a Monopolist Shut Down in the Short Run