Seeing is believing!
Before you order, simply sign up for a free user account and in seconds you'll be experiencing the best in CFA exam preparation.
Basic Question 14 of 22
If a regulatory commission sets a monopolist's price at the level where the demand curve intersects the firm's average total cost curve, the firm would ______
B. incur losses and eventually go out of business.
C. earn only a normal profit.
A. earn economic profit.
B. incur losses and eventually go out of business.
C. earn only a normal profit.
User Contributed Comments 2
| User | Comment |
|---|---|
| sharky7 | Is this because since P=ATC , economic profit = 0, and normal profit is that profit that makes the economic profit 0? |
| nabada0419 | sharky7, you are right. The firm will earn zero economic profit = normal profit. |
I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
Barnes
Learning Outcome Statements
describe characteristics of perfect competition, monopolistic competition, oligopoly, and pure monopoly
CFA® 2024 Level I Curriculum, Volume 1, Module 1.