Which of the following is true under monopoly?
A) Profits are always positive.
B) P minimum of ATC.
C) P = MR.
D) None of the preceding answers is correct.

Question

Which of the following is true under monopoly?
A) Profits are always positive.
B) P > minimum of ATC.
C) P = MR.
D) None of the preceding answers is correct.

Quizplus · Accepted Answer

Under monopoly, profits can be positive, zero, or negative; price (P) can be equal to, greater than, or less than the minimum of average total cost (ATC); and price (P) is typically greater than marginal revenue (MR), not equal, due to the downward-sloping demand curve faced by monopolists.

Which of the Following Is True Under Monopoly