# Assume a monopolist's marginal cost and marginal revenue curves intersect and the demand curve...

## Question:

Assume a monopolist's marginal cost and marginal revenue curves intersect and the demand curve passes above its average total cost curve. The firm will:

a. lower the price.

b. make an economic profit.

c. stay in operation in the short run but shut down in the long run.

d. shut down in the short run.

## Marginal Revenue and Marginal Cost:

In economics, the marginal cost is the cost required to produce an additional unit of a good or service. The marginal revenue, on the other hand, is the additional revenue a firm gets from selling an additional unit of a good or service.

## Answer and Explanation: 1

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- The correct answer is:
__b. make an economic profit.__

A monopolist's profits are maximized when the marginal revenue is equal to the marginal cost...

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Chapter 3 / Lesson 44Explore the concept of a legal monopoly, including real-world examples of legal monopolies. Learn about how governments regulate and support legal monopolies.

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