If a Permanent Drop in Demand Causes a Monopolist to Earn

question 148

Multiple Choice

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

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Definitions:

Subspecies

A taxonomic category that ranks below species, used to classify variations within a species that are distinct in form or behavior, but still capable of interbreeding.

Behavioral Differences

Variations in actions and reactions among individuals or groups, often studied to understand psychological, social, or species-specific traits.

Copper-colored Pigment

A pigment known for its distinctive reddish-brown hue, often found in art, cosmetics, and natural occurrences.

Melanin

A pigment found in the skin, hair, and eyes of humans and animals that determines coloration and offers protection against UV radiation.