Microeconomics 6th Edition by Robert Hall, Shirley Kuiper, Marc Lieberman

Exercise 12

Draw demand,MR ,MC ,AVC ,and ATC curves that show a monopolist operating at a loss that would cause it to stay open in the short run,but exit the industry in the long run. Then,show how a technological advance that lowers only the monopolist's fixed costs could cause a change in its long-run exit decision.