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 the above.

Question

Quizplus · Accepted Answer

In the short run, a monopolist will operate if the price is above average variable cost. This is because if the price is above average variable cost, the firm is still generating revenue that covers its variable costs and contributes towards its fixed costs and profit. Marginal cost and marginal revenue are important in determining the profit-maximizing quantity, but they do not necessarily determine whether the firm will operate in the short run or not.

A Monopolist Will Operate in the Short Run If Which