-Which of the following is a TRUE statement about a monopoly?
A) A monopoly does not necessarily earn positive economic profits.
B) A monopoly must earn an above-normal profit to stay in business.
C) As long as there are barriers to entry, a monopoly can always find some price-output combination that generates positive economic profits.
D) As long as the demand curve slopes down, a monopoly can always find some price-output combination that generates positive economic profits.

Question

-Which of the following is a TRUE statement about a monopoly?
A) A monopoly does not necessarily earn positive economic profits. 
B) A monopoly must earn an above-normal profit to stay in business. 
C) As long as there are barriers to entry, a monopoly can always find some price-output combination that generates positive economic profits. 
D) As long as the demand curve slopes down, a monopoly can always find some price-output combination that generates positive economic profits.

Quizplus · Accepted Answer

A monopoly does not necessarily earn positive economic profits because it depends on the cost structure and demand conditions. Even with barriers to entry, a monopoly might not cover its costs if demand is too low or costs are too high.

-Which of the Following Is a TRUE Statement About a Monopoly