Which of the following is true?
A)A monopolist cannot make economic losses in the short run.
B)A monopolist cannot make economic losses in the long run.
C)A monopolist always makes economic profits.
D)A monopolist never makes economic profits.

Question

Quizplus · Accepted Answer

A monopolist can make economic losses in the short run if its total revenue is less than its total variable costs. However, in the long run, if the monopolist continues to experience economic losses, it may exit the industry or adjust its prices and/or output to eventually break even. Thus, a monopolist cannot sustain economic losses in the long run. In terms of economic profits, a monopolist can make economic profits in the short run, but in the long run, competitors may enter the market and drive down prices, reducing the monopolist's profits. Therefore, neither option C nor option D is always true.

Which of the Following Is True