For a monopolist to earn a positive economic profit,price has to exceed average total cost at the level of output at which marginal revenue equals marginal cost.

Question

Quizplus · Accepted Answer

In order for a monopolist to earn economic profit, they must charge a price that is higher than their average total cost at the output level where marginal revenue equals marginal cost. This is because the monopolist has market power and can effectively charge a higher price than what a competitive market would bear. However, if the price is below average total cost, the monopolist would incur losses. Therefore, the statement is true.

For a Monopolist to Earn a Positive Economic Profit,price Has