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MMLU / When a monopolist has maximized profit,

Problem

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question

When a monopolist has maximized profit,

choices

  1. price is set equal to marginal cost, creating zero economic profit.
  2. output is set where price is equal to average total cost.
  3. price is set above marginal cost, creating allocative inefficiency.
  4. any short-run profit will be eliminated through the long-run entry of new firms.

subject

high_school_microeconomics

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Source and history

Official source

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