Asked by cheyanne smith on May 25, 2024
Verified
A pure monopolist:
A) will realize an economic profit if price exceeds ATC at the profit-maximizing/loss-minimizing level of output.
B) will realize an economic profit if ATC exceeds MR at the profit-maximizing/loss-minimizing level of output.
C) will realize an economic loss if MC intersects the downsloping portion of MR.
D) always realizes an economic profit.
Economic Profit
The financial gain that exceeds the total costs, including both explicit and implicit costs, involved in a business activity.
ATC
Average total cost, which is the total cost of production divided by the number of goods produced, indicating the average cost per unit.
Profit-maximizing
The process of identifying the output level at which a business can achieve the highest possible profit.
- Explain the conditions under which a monopolist will realize economic profits or losses.
Verified Answer
Learning Objectives
- Explain the conditions under which a monopolist will realize economic profits or losses.
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