In the long run in monopoly:
A) Only normal profits are made.
B) Abnormal profits can be made.
C) Firms produce where price equals marginal cost.
D) Firms produce where average cost equals average revenue.

Question

Quizplus · Accepted Answer

In a monopoly, a single firm controls the entire market, allowing it to set prices above marginal costs, which can lead to abnormal (or supernormal) profits in the long run. Unlike competitive markets where firms can only make normal profits in the long run due to free entry and exit, monopolies face barriers to entry that protect their ability to earn these abnormal profits.

In the Long Run in Monopoly