d. Suppose economic conditions change in such a way that the demand curve for your company shifts left. i. Draw a demand curve on the bottom graph on Figure 1 that leads to zero economic profits. ii. Draw a demand curve on the bottom graph on Figure 1 such that any further leftward demand shift will cause you to shutdown.

Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter23: Monopoly
Section23.5: Price Discrimination
Problem 2ST
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Please note: Parts a, b, and c are already answered. Please answer part d which has two subparts. 

You are the manager of a monopoly with costs, demand, and marginal revenue as in the graph at the top of Figure 1 attached.

d. Suppose economic conditions change in such a way that the demand curve for your company shifts left.
i. Draw a demand curve on the bottom graph on Figure 1 that leads to zero economic profits.
ii. Draw a demand curve on the bottom graph on Figure 1 such that any further leftward demand shift will cause you to shutdown.

MC
ATC
AVC
Demand
AFC
MR
MC
ATC
AVC
Demand
AFC
Figure 1: Demand, and costs for a monopolist.
Transcribed Image Text:MC ATC AVC Demand AFC MR MC ATC AVC Demand AFC Figure 1: Demand, and costs for a monopolist.
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