Over the long run, a monopolist can earn:
A) an economic profit while operating inefficiently.
B) an economic profit, but must operate efficiently.
C) only a normal profit, and operates at the lowest point on its long-run average total cost curve.
D) only a normal profit, but does not operate at the lowest point on its long-run average total cost curve.

Question

Quizplus · Accepted Answer

Monopolists can earn economic profits in the long run due to barriers to entry that prevent competition. They may not operate at peak efficiency because they face no competition that would force them to minimize costs.

Over the Long Run, a Monopolist Can Earn