Which of the following statements is true of a monopolist?
A)The firm charges the highest possible price.
B)The firm always earns a profit.
C)The firm might earn a profit in the long run.
D)The firm generates a larger consumer surplus than a perfectly competitive firm.
E)The firm is more production efficient than a perfectly competitive firm.

Question

Quizplus · Accepted Answer

A monopolist might earn a profit in the long run because it can set prices above marginal cost due to lack of competition, unlike in a perfectly competitive market where firms can only earn normal profits in the long run.

Which of the Following Statements Is True of a Monopolist