Homework Answers
A) 
Average cost is more than average revenue so monopoly make losses.
B) monopolis can incurr losses in short run by lowering its price it incurr losses to keep new firms away it only shut down if it's losses exceeds it's fixed cost. A monopoly presumed to produce quantity which minimize economic losses.
C)
As monopolist have downward sloping demand curve he has a power to reduce quantity and increase price as it reduce quantity from Q' to Q it's price rises from P' to P but it doesn't get more of both because of downward sloping demand curve if one rises then another falls .
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