If the average total cost curve is always above the demand curve for a monopolist, _____.
A)the monopolist will be suffering from economic losses
B)the monopolist will be facing higher competition as there will be increased entry of rival firms into the market
C)the monopolist will be earning an economic profit
D)the monopolist will be producing inefficiently
E)the monopolist will be earning normal profit

Question

Quizplus · Accepted Answer

The average total cost curve being above the demand curve for a monopolist implies that the monopolist is producing at a level of output where the cost of production exceeds the revenue generated from selling that output. This means that the monopolist is incurring economic losses.

If the Average Total Cost Curve Is Always Above the Demand