If a monopolist is producing an output at a point where ATC P MC, then it is
A) breaking even.
B) earning positive economic profits.
C) earning negative economic profits.
D) covering total costs but not total variable costs.

Question

If a monopolist is producing an output at a point where ATC > P > MC, then it is
A) breaking even.
B) earning positive economic profits.
C) earning negative economic profits.
D) covering total costs but not total variable costs.

Quizplus · Accepted Answer

ATC > P > MC implies that the monopolist is producing at a point where it is incurring losses.

If a Monopolist Is Producing an Output at a Point