Which of the following is true of the profit earned by a monopolist?
A)Profit is maximized where marginal revenue exceeds marginal cost.
B)Normal profit is ensured where price is equal to average total cost.
C)Normal profit is ensured where marginal cost exceeds average revenue.
D)Profit is maximized along the inelastic portion of the demand curve.
E)Economic profit is made where average variable cost equals marginal revenue.

Question

Quizplus · Accepted Answer

Normal profit occurs when a firm's total revenue equals its total costs, which happens where price equals average total cost. This is a condition for a firm to continue operating in the long run without making an economic profit or loss.

Which of the Following Is True of the Profit Earned