The figure given below shows the cost and revenue curves of a monopolist.Figure 11.9
D: Average revenue
MR: Marginal revenue
ATC: Average total cost
MC: Marginal cost
-In the short-run, a monopolistically competitive firm:
A)can earn only a normal profit.
B)will produce at the point where marginal revenue is greater than marginal cost, in order to maximize profits.
C)will produce at the point at which price equals minimum ATC, to maximize profits.
D)will charge a price equal to its marginal revenue.
E)will shut down temporarily if price is less than AVC.

Question

The figure given below shows the cost and revenue curves of a monopolist.Figure 11.9
  D: Average revenue
MR: Marginal revenue
ATC: Average total cost
MC: Marginal cost
-In the short-run, a monopolistically competitive firm:
A)can earn only a normal profit. 
B)will produce at the point where marginal revenue is greater than marginal cost, in order to maximize profits. 
C)will produce at the point at which price equals minimum ATC, to maximize profits. 
D)will charge a price equal to its marginal revenue. 
E)will shut down temporarily if price is less than AVC.

Quizplus · Accepted Answer

The Answer is E

The Figure Given Below Shows the Cost and Revenue Curves