Suppose a Monopolist's Demand Curve Lies Below Its Average Variable

question 75

Multiple Choice

Suppose a monopolist's demand curve lies below its average variable cost curve. The firm will:

• A) stay in operation in the short-run.
• B) earn an economic profit.
• C) earn an economic profit in the long run.
• D) shut down.

Understand the importance of economies of scale in large businesses.

Identify the most valuable assets in small businesses.

Recognize common causes and exceptions to business failures.

Distinguish between types of innovation and their impact on business development.

---

Definitions:

Bony Labyrinth

An elaborate network of pathways and spaces located in the temporal bone of the skull, containing the inner ear's hearing and balance mechanisms.

Ossicles

Small bones, particularly referring to the three bones found in the middle ear known as the malleus, incus, and stapes, crucial for hearing.

Membranous Labyrinth

An intricate structure within the inner ear containing fluid-filled tubes and sacs, essential for hearing and balance.

Bony Labyrinth

A complex system of passages and cavities within the temporal bone of the skull, housing the organs of hearing and balance.