CFA Practice Question
If a regulatory agency sets prices equal to a monopoly's long-run average cost (LRAC), the monopoly will most likely have economic profit that is ______.
A. positive
B. negative
C. zero
Explanation: If regulators set the price to equal long-run average cost, the monopolist will earn zero economic profits.
User Contributed Comments 0
You need to log in first to add your comment.