(a) Use ONLY a diagram and show a monopoly that, due to its cost structure, will stay open in the short-term but will close down in the long term. 

(b) In a different diagram, you are to assume that a technological change will lower only the monopolist’s fixed costs. Show what will happen to the monopolist’s long-term situation.

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MC MC Price Cost Price Cost Market Price ATC ATC Economic Profit D D MRMC ... View the full answer