In the long run equilibrium for a monopolist
A)The short-run average cost curve is at its lowest point
B)The long-run average cost curve is at its lowest point
C)A and b
D)None of the above is necessarily true

Question

Quizplus · Accepted Answer

In the long run equilibrium, a monopolist does not necessarily produce at the lowest point of the short-run or long-run average cost curves. The monopolist maximizes profit where marginal cost equals marginal revenue, which may not coincide with the lowest average cost.

In the Long Run Equilibrium for a Monopolist