Why might a business owner keep the business open

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a.) A pure monopolist determines that at the current level of output the marginal cost of production is $2, average variable costs are $2.75, and average total costs are $2.95. The marginal revenue is $2.75. What would you recommend that the monopolist do to maximize profits?

b.) Why might a business owner keep their business open but let it deteriorate, rather than shut it down? Will this profitability last?

Reference no: EM13202272

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