A Monopolist Will Only Be Able to Make a Profit

question 162

True/False

A monopolist will only be able to make a profit if,at some output level,the average revenue exceeds the average cost.

---

Definitions:

Substitution Effect

The economic principle that as the price of a good or service rises, consumers will replace it with cheaper alternatives, affecting the demand for goods.

Normal Good

A Normal Good is a type of good for which demand increases as the income of consumers increases and decreases when consumer income decreases, all else being equal.

Indifference Curve

A curve showing the different combinations of two products that yield the same satisfaction or utility to a consumer.