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.

---

Definitions:

Closed Economy

An economy that does not interact with other economies in the world

Government Deficit

Occurs when a government spends more money than it receives in revenue over a specific period, leading to borrowing or currency issuance.

Closed Economy

An economic system that doesn't engage in international trade, relying solely on its own resources and internal market for growth and development.

National Saving

The total amount of savings generated within a country from both the private and public sectors.