Suppose a Monopolist Has Positive Fixed Costs and Constant Marginal

question 106

Multiple Choice

Suppose a monopolist has positive fixed costs and constant marginal costs.If the government regulates a monopoly's price to marginal cost,in the long run:

• A) the monopolist will earn a profit if ATC > MC.
• B) the monopolist will exit the industry.
• C) the monopolist will earn a profit if ATC > P.
• D) the monopolist will earn zero profits.

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Definitions:

Proactive Interference

The tendency for older or previously learned material to impede the recall of newer material.

Serial Reproduction

A method of studying memory where information is passed and reproduced through a chain of individuals.

Recency Effect

The phenomenon where people tend to remember the last items in a series best, often observed in studies of memory and information recall.

Primacy Effect

The tendency to remember information presented at the beginning of a list better than information at the middle or end.