Which of the following statements is not correct?
A)A monopolist's ability to act as a price setter guarantees economic profits in the short run.
B)The monopolist's marginal revenue is less than the price for any output greater than one.
C)A monopolist's demand curve is the same as the market demand curve for the product.

Question

Quizplus · Accepted Answer

A monopolist's ability to act as a price setter does not guarantee economic profits in the short run. Economic profits can only be guaranteed if the monopoly is protected by barriers to entry, allowing it to maintain its market power and prevent competition from entering the market. Without such barriers, other firms may eventually enter the market and compete away the monopoly's profits.

Which of the Following Statements Is Not Correct