If a permanent drop in demand causes a monopolist to earn below-normal profits in the long run, this monopolist
a. will always exit the market in the long run
b. will be forced by the government to continue operating in the long run
c. may continue operating in order to avoid alienating its customers
d. will exit the market in the long run only if it cannot cover its fixed costs
e. will use limit pricing to reduce the size of its loss
A
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The economy is in long-run equilibrium when Senator Soldout argues that the Fed should do more to fight unemployment. He argues that if the Fed increased the money supply faster, more workers would find jobs. The Senator's argument
a. is completely correct. b. is completely wrong. c. is true for the short run but not the long run. d. is true for the long run but not the short run.
The primary benefit of voluntary trade is that
a. it allows developers to put land to better use through eminent domain. b. the prices of goods and services rise. c. people on both sides of the trade are made better off. d. it increases tax revenue.