Which of the following statements best describes the price, output, and profit conditions of monopoly?
A) Price will equal marginal cost at the profit-maximizing level of output and profits will be positive in the long run.
B) Price will always equal average variable cost in the short-run and either profits or losses may result in the long run.
C) In the long run, positive economic profit will be eliminated.
D) None of the above.

Question

Quizplus · Accepted Answer

In a monopoly, price is set above marginal cost, and monopolists can earn positive economic profits in the long run due to barriers to entry preventing competition.

Which of the Following Statements Best Describes the Price, Output