Assume a Monopolist's Marginal Cost and Marginal Revenue Curves Intersect

question 72

Multiple Choice

Assume a monopolist's marginal cost and marginal revenue curves intersect and the demand curve passes above its average total cost curve. The firm will

• A) make an economic profit.
• B) stay in operation in the short run, but shut down in the long run.
• C) shut down in the short run.
• D) lower the price.

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Definitions:

Market Index

A statistical aggregate that measures the performance of a basket of stocks to represent a particular market or sector.

Beta Coefficients

Statistical measures indicating the volatility of a stock or portfolio in comparison to the volatility of the overall market.

Industry Group

A classification of companies that conduct similar types of business, used for analysis and comparison within the stock market.

Dividend Yield

The annual dividend payment expressed as a percent of the stock price.