In the short-run equilibrium, a monopolist's profits
A) may be positive, negative, or zero.
B) are positive because of the monopolist's market power.
C) are positive if the product's elasticity of demand is less than 1.
D) are positive if the product's elasticity of demand is greater than 1.

Question

Quizplus · Accepted Answer

In the short-run, a monopolist's profits can be positive, negative, or zero, depending on the demand and cost conditions. Just having market power does not guarantee positive profits, as the monopolist may face high costs or low demand. The elasticity of demand also does not necessarily determine profits, as it depends on the specific numbers involved.

In the Short-Run Equilibrium, a Monopolist's Profits