In the short run, a monopolist's economic profits
A) are always positive because the monopolist is a price-maker.
B) are usually negative because of government price regulation.
C) are always zero because consumers prefer to buy from competitive sellers.
D) may be positive or negative depending on market demand and cost conditions.

Question

Quizplus · Accepted Answer

A monopolist's economic profits in the short run may be positive or negative depending on market demand and cost conditions. A monopolist has the ability to set prices, which can result in higher profits if demand is inelastic. However, if costs are high or demand is elastic, the monopolist may see negative economic profits.

In the Short Run, a Monopolist's Economic Profits