The legally bound obligation to pay debts:

In the mid-1990s, cattle ranchers in the United States kept raising cattle even though prices were at a ten-year low and below average total cost. What is the likely explanation for this?

A) The ranchers were hoping to receive government subsidies. B) The exit costs were too high. C) Continuing to operate resulted in smaller losses than would have been incurred by shutting down. D) Cattle is an important source of protein and its production is essential for the United States.

A monopoly might produce less than the socially optimal amount of pollution because

A) it likes to be a good citizen. B) it sets price above marginal cost. C) it earns economic profit. D) it internalizes the external costs.