A single-price monopolist is producing 8,000 units of output. At that level, price equals $10, average total cost equals $12, and average variable cost equals $8 . In addition, both marginal cost and marginal revenue equal $6 . Which of the following statements is correct in the short run?
a. The firm is earning total revenues equal to $96,000.
b. The firm could reduce its loss by shutting down.
c. The firm has a loss per unit equal to $4.
d. The firm is minimizing its economic loss at $16,000.
e. The firm is earning an economic profit equal to $16,000.
D
Economics
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