"All monopolies operate with positive economic profits." Do you agree or disagree? Why?
What will be an ideal response?
Disagree. Monopolies can receive negative economic profits and can go out of business. If there is no price that lies above average total costs, the firm will receive negative economic profits. In the short run, it will continue to operate as long as price is greater than average variable cost, but it will go out of business in the long run.
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In Figure 10-5 above, suppose that a "neutral" technological improvement occurs. This causes a movement of the steady-state point such as from points
A) A to B. B) D to B. C) D to C. D) A to C. E) A to D.
On the graph above, unplanned inventory investment occurs if the economy is moving from point ________ to point ________
A) D; C B) C; B C) B; A D) all of the above E) none of the above
Refer to Figure 2.1. At point A, demand is:
A) completely inelastic. B) inelastic, but not completely inelastic. C) unit elastic. D) elastic, but not infinitely elastic. E) infinitely elastic.
Saving is like:
A. selling the right to use your money for a time. B. buying the right to use someone else's money. C. buying the right to use your money for a time. D. selling the right to use someone else's money.