Answer to Question #49261 in Microeconomics for john baker

Question

Similar to a perfectly competitive firm, a monopolist that is confronted with fixed costs in the short run should produce versus shut down if the total revenue that it can generate is sufficient to cover its:
Similar to a perfectly competitive firm, a monopolist that is confronted with fixed costs in the short run should produce versus shut down if the total revenue that it can generate is sufficient to cover its

Answer 1

Similar to a perfectly competitive firm, a monopolist that is confronted with fixed costs in the short run should produce versus shut down if the total revenue that it can generate is sufficient to cover its total variable costs (TR > TVC). Because if the total revenue are lower, than variable costs, a monopolist should shut down.