(1) Draw a monopoly making a profit. Label the MC, ATC, D, MR, price and quantity. Show the area of profit.

a ) does the firm in the above graph operate in elastic or inelastic range of the demand curve ? how do you know ?

(2) Draw a monopoly making a loss . Label the MC, ATC, AVC, D, MR, price and quantity. Show the area of loss.

(3) what would cause monopoly to shutdown ?

(4) how do monopolies differ from perfect competition in long run in terms of profit and efficiency ?