A monopolist that fails to recover a short-run loss in the long run generally leaves the market.

Question

Quizplus · Accepted Answer

This is because in the long run, the monopolist has the opportunity to adjust their prices and output levels to maximize their profits. If they are unable to recover their short-run losses in the long run, it suggests that their market power is not strong enough or that there is intense competition that forces them to leave the market.

A Monopolist That Fails to Recover a Short-Run Loss in the Long