A monopoly can earn positive profits because it
A)can sell unlimited quantities at any price it chooses.
B)takes the market price as given and can sell unlimited quantities.
C)can set the price it charges for its output but faces a horizontal demand curve.
D)can maintain a price such that total revenues will exceed total costs.

Question

Quizplus · Accepted Answer

Monopolies can set prices above marginal costs due to lack of competition, allowing them to earn positive profits by ensuring total revenues exceed total costs.

A Monopoly Can Earn Positive Profits Because It