Which of the following statements best describe the price, output, and profit conditions of monopoly?
A) Price will equal marginal cost at the profit-maximizing level of output and profits will be positive in the long-run.
B) Price will always equal average variable cost in the short-run and either profits or losses may result in the long run.
C) In the long-run, positive economic profit will be earned.
D) All of the above are true.

Question

Quizplus · Accepted Answer

In a monopoly, the firm can set prices above marginal cost, leading to positive economic profits in the long run due to lack of competition.

Which of the Following Statements Best Describe the Price, Output