Similar to a perfectly competitive firm, if a monopolist can charge a price that exceeds average variable cost, it will minimize short-run losses by producing where marginal revenue equals marginal cost rather than shutting down.

Question

Quizplus · Accepted Answer

Both a monopolist and a perfectly competitive firm will continue to produce in the short run as long as the price (or marginal revenue for the monopolist) is above the average variable cost, aiming to produce where marginal revenue equals marginal cost to minimize losses or maximize profits.

Similar to a Perfectly Competitive Firm, If a Monopolist Can