nessmenttake/aunchjspcourse assessment,id 138360 1couse.id 15642 18content jid 1

Question

nessmenttake/aunchjspcourse assessment,id 138360 1couse.id 15642 18content jid 1435474 1step Remaining Time: 16 minutes, 36 seconds. Question Completion Status: 10 points Save An Exhibit 9-13 s/O C ATC AVC MR n the short run, the monopolist depicted in Exhibit 9-13 should A. shut down because P AVC at some output levels B. shut down because P ATC at all output levels C. continue producing because P> AVC at some output levels D.continue producing because P> ATC at all output levels E. cortrue producing because monopolists never shut down 10 points Save A

Explanation / Answer

Correct option: (D)

Reason: Monopolists produce at the point MR = MC

The price corresponding to this level is lower than ATC but higher than AVC.

Since in the short run if the price is greater than AVC, firm should continue operating as it is still covering variable costs, similarly in the given case since P > AVC, it should continue producing in the short run.

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