If a permanent drop in demand causes a monopolist to earn below-normal profits in the long run,this monopolist
A)will always exit the market in the long run
B)will be forced by the government to continue operating in the long run
C)may continue operating in order to avoid alienating its customers
D)will exit the market in the long run only if it cannot cover its fixed costs
E)will use limit pricing to reduce the size of its loss

Question

Quizplus · Accepted Answer

The Answer of If a permanent drop in demand causes a monopolist to earn below-normal profits in the long run,this monopolist
A)will always exit the market in the long run
B)will be forced by the government to continue operating in the long run
C)may continue operating in order to avoid alienating its customers
D)will exit the market in the long run only if it cannot cover its fixed costs
E)will use limit pricing to reduce the size of its loss

If a Permanent Drop in Demand Causes a Monopolist to Earn