If a change in fixed cost in the long run raises average total cost above the demand curve:
A) price and output will remain unchanged.
B) more monopolies will enter.
C) the monopoly will go out of business.
D) none of the above is true.

Question

Quizplus · Accepted Answer

If average total cost exceeds the demand curve, the monopoly cannot cover its costs and will eventually go out of business.

If a Change in Fixed Cost in the Long Run