If the average total cost curve is always above the demand curve of a monopolist,
A) the profits of the monopolist will be large.
B) the monopolist must be producing inefficiently.
C) even a monopolist will suffer economic losses.
D) entry will occur, forcing the monopolist to reduce price and expand output.

Question

Quizplus · Accepted Answer

If the average total cost curve is always above the demand curve, the monopolist cannot cover its costs at any level of output, leading to economic losses.

If the Average Total Cost Curve Is Always Above the Demand