If the average total cost curve is always above the demand curve of a monopolist:
A) that monopolist will suffer economic losses.
B) entry will occur, forcing the monopolist to reduce price and expand output.
C) the monopolist will earn an economic profit.
D) the monopolist must be producing inefficiently.

Question

Quizplus · Accepted Answer

If the average total cost curve is always above the demand curve, the monopolist cannot cover its costs at any level of output, leading to economic losses.

If the Average Total Cost Curve Is Always Above the Demand