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Suppose a monopolists demand curve lies below its average variable cost curve. The firm will:

a. stay in operation in the short run.

b. earn an economic profit.

c. earn an economic profit in the long run.

d. shut down

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manhokwe tawanda
manhokwe tawandaLv10
29 Jan 2021

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Related questions

Assume a monopolist's marginal cost and marginal revenue curves intersect and the demand curve passes above its average total cost curve. The firm will:

a. make an economic profit

b.stay in operation in the short run, but shut down in the long run.

c.shut down in the short run

d.lower price.

Consider the graph of a perfectly competitive firm in the short-run given below.
 
a. If the firm's demand curve is MR3, does the firm earn an economic profit or loss
 
b. Which demand curve(s) indicate(s) the firm incurs a loss?
 
c. Which demand curve(s) indicate the firm would shut down?
 
d. Identify the firm's short-run supply curve? 
 
Consider the graph of a perfectly competitive firm in the short-run given below.
 
a. If the firm's demand curve is MR3, does the firm earn an economic profit or loss
 
b. Which demand curve(s) indicate(s) the firm incurs a loss?
 
c. Which demand curve(s) indicate the firm would shut down?
 
d. Identify the firm's short-run supply curve? 
 

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