A (non-price discriminating) monopolist with zero marginal cost but recurring fixed costs may end up not producing even if it would be efficient for him to produce.

Question

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This can happen because even though the monopolist has zero marginal cost, they still have to cover their recurring fixed costs. If the price they can charge for their product is not high enough to cover those costs, they may choose not to produce at all rather than operate at a loss. This can lead to an inefficient outcome where consumers are willing to pay more for the product than it costs to produce, but the monopolist chooses not to produce at all.

A (Non-Price Discriminating) Monopolist with Zero Marginal Cost but Recurring