A monopolist will break even if it is producing an output at which the average revenue is equal to the average cost.

Question

Quizplus · Accepted Answer

This is because at the output level where average revenue (AR) = average cost (AC), the monopolist is earning enough revenue to cover all of its costs including fixed costs. However, the monopolist is not earning any profit or incurring any losses at this output level, and therefore it is breaking even.

A Monopolist Will Break Even If It Is Producing an Output