Suppose That the Only Maker of a Particular Type of Horse

question 44

Multiple Choice

Suppose that the only maker of a particular type of horse hair clothing exits the industry because demand is too low.The correct analysis of this situation is that

• A)the producer's decision is irrational, since monopolies are not limited by the demand curve
• B)the producer's decision is irrational, since monopolies never go out of business
• C)the producer's decision is irrational, since it could simply raise the price
• D)the price received by the producer was lower than the marginal cost in the long run
• E)the price received by the producer was lower than the average total cost in the long run

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Definitions:

Treason

The crime of betraying one's country, particularly by attempting to kill the sovereign or overthrow the government.

Burr

A reference to Aaron Burr, the third Vice President of the United States, known for killing Alexander Hamilton in a duel and for his controversial political career.

Northwest Territory

A historic region of the United States that encompassed the area northwest of the Ohio River, established as a territory in 1787 and played a key role in westward expansion.