Will all monopolistic firms always generate economic profits? Why or why not?
No, a monopolistic firm will not necessarily generate an economic profit. If a firm is the only seller but demand falls then the firm may generate an economic loss in the short run. Graphically this type of loss would be illustrated as the demand curve lying below the ATC curve.
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In the analysis of the interest rate effect, when the price level changes, the quantity of money households and firms' want to hold changes in the ______ direction as interest rates, while investment changes in the _____ as the quantity RGDP demanded
a. Same, same b. Same, opposite c. Opposite, same d. opposite, opposite
Which of the following is an explicit cost production?
A. the electric bill
B. wages paid to workers
C. purchases of raw material
D. Only answers A and B are explicit costs because the purchases of raw material is only an opportunity cost.
E. Answers A, B, and C are all