In the short run, a monopoly should shut down whenever
a. marginal revenue exceeds marginal cost
b. price is less than average total cost
c. total revenue is less than total cost
d. price exceeds the ratio of marginal cost to average cost at the optimal output
e. price is less than average variable cost everywhere
E
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Suppose there is a temporary supply shock because of a war in the Middle East, then ________
A) this would constitute a cost push shock due to a restriction in the supply of oil B) the AS curve would shift to the left C) this could theoretically lead to stagflation D) all of the above E) none of the above
Use the following graphs to answer the next question.
The graphs show the long-run average total cost (LRATC) curve for cars. For which graph is the output level Q0 at minimum efficient scale?
A. Graph 1 B. Graph 2 C. Graph 3 D. Graph 4