Question 44 1 pt In the long run, if a monopoly is making a loss when operating

Question

Question 44 1 pt In the long run, if a monopoly is making a loss when operating at the proft maximizing pointbut producing at a price above its average variable cost, the monopoly will shut down. the monopoly will stay in business. the monopoly should decrease its price in order to make a profit the monopoly should increase its price in order to make a profit. Question 45 1 pts When the demand for a product is elastic: a decrease in price will leave total revenue unchanged the good is an inferior good a decrease in price will reduce total revenue a decrease in price will raise total revenue

Explanation / Answer

(Question 44) Option (A)

A monopolist will have no competition even in long run. So if the firm makes ong run loss, it will shut down and exit the market.

(Question 45) Option (D)

When demand is elastic (inelastic), a N% decrease in price will increase quantity demanded by more than (less than) N%, therefore revenue will increase (decrease).

(Question 46) Option (B)

In short run, at least one factor is fixed, therefore fixed costs exist.

(Question 47) Option (D)

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