If a firm with market power is not making enough profit (in equilibrium),

Question

Accepted Answer

it will exit the industry in the long run if economic profit is negative.

Answer

None of the above.

Answer

it will lower price thereby increasing total revenue because demand is elastic.

Answer

it will expand sales until it reaches the unit elastic point on demand.

Answer

it will raise price thereby increasing total revenue because demand is inelastic.

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