All of the following,except one,are true at the output(s)where a monopolist breaks even.Which is the exception?
A)TC = TR.
B)Profits are maximized.
C)AR = AC.
D)Economic profits are zero.

Question

Quizplus · Accepted Answer

When a monopolist breaks even, it means that its total revenue (TR) equals its total cost (TC) which is true for option A. The monopolist is neither making a profit nor incurring a loss which means its economic profits are zero, therefore, option D is also true. At the output where the monopolist breaks even, its average revenue (AR) is also equal to its average cost (AC) which makes option C true. However, option B is not true as the monopolist maximizes its profits at the output where marginal revenue (MR) equals marginal cost (MC), which may not necessarily coincide with the output where it breaks even.

All of the Following,except One,are True at the Output(s)where a Monopolist