Review the following graph showing the short-run situation of a monopolist. What output level does the firm choose in the short run? Why?The firm will shut down in the short run. Average total cost exceeds average revenue at all output levels, indicating that the monopolist cannot earn a normal profit in the short run. In addition, average variable cost also exceeds price. Thus, if the firm operates in the short run, it will suffer a loss equal to its fixed cost plus the uncovered portion of its variable cost.