If the monopoly's demand curve intersects the AVC curve at minimum AVC, the firm will shut down
Indicate whether the statement is true or false
False. If that is the case, marginal cost will intersect marginal revenue at some quantity that is less than the quantity that minimizes AVC. The price that consumers are willing to pay for that quantity will be compared to the AVC for that quantity.
You might also like to view...
The above figure shows the demand and cost curves facing a monopoly. At the profit-maximizing price, the elasticity of demand equals
A) -1. B) zero. C) infinity. D) -3.
A business incurs the following costs per unit: Labor $125/unit; Materials $45/unit and rent $250,000/month. If the firm produces 1,000,000 units a month, the total costs equal
a. $125,250,000 b. $170,250,000 c. $125,050,000 d. $170,050,000
A perfectly competitive firm that earns a normal profit in the long run actually earns zero economic profit
a. True b. False Indicate whether the statement is true or false
Growth compatible institutions:
A. allow people to gain income for themselves by creating impediments for others. B. encourage people to pursue activities that inhibit growth in others. C. have incentives built into them that lead people to put forth effort. D. encourage people to spend a lot of time in leisure pursuits.