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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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