(a) Draw three graphs showing for a monopolist, the best level of output using three alternative average cost curves, showing that the monopolist (1) makes a profit, (2) breaks even, and (3) incurs a loss.

(b) Will the monopolist continue to produce in the short run if a loss is incurred at the best short-run level of output?

(c) What would happen to this monopolist in the long run if it continues to earn profits?