Asked by Justin Maynes on Jun 11, 2024
Verified
Assuming the monopolist shown in the graph adjusts output to maximize profits,it is
A) earning profits in the short-run.
B) having losses in the short-run.
C) earning profits in the long-run.
D) earning profits and could be in the short-run or long-run.
Monopolist
An individual or company that holds exclusive control over the supply or trade of a particular good or service, allowing them to influence prices and market conditions.
Short-Run
The short-run in economics refers to a period during which at least one input, such as plant size, is fixed and cannot be changed.
Long-Run
A period of time in which all factors of production and costs are variable, allowing for full adjustment to changes.
- Ascertain and expound upon the scenarios in which monopolies can either operate at a deficit or generate profits.
Verified Answer
VT
Victoria TurrellJun 14, 2024
Final Answer :
D
Explanation :
A monopolist maximizes profits where marginal revenue equals marginal cost, regardless of the time frame (short-run or long-run). The question's premise doesn't specify a time frame, implying that profit maximization can occur in either period.
Learning Objectives
- Ascertain and expound upon the scenarios in which monopolies can either operate at a deficit or generate profits.