Refer to Figure 15-3. What happens to the monopolist represented in the diagram in the long run?
A) It will be forced out of business by more efficient producers.
B) It will raise its price at least until it breaks even.
C) If the cost and demand curves remain the same, it will exit the market.
D) The government will subsidize the monopoly to enable it to break even.
C
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The above figure shows the market for a particular good. If the market is controlled by a perfect-price-discriminating monopoly, compared to a perfectly competitive market, the change in producer surplus is
A) B + C. B) D + E. C) A + B + C. D) A + B + C + D + E.
When a firm's marginal productivity of an input eventually declines as the quantity of input increases, then the production is experiencing
a. Diminishing returns to scale b. Diminishing marginal product c. Increasing returns to scale d. Increasing marginal product