In the short-run, the monopoly makes?
A. Normal profit
B. Abnormal Profit
C. Loss
D. Sales
Correct Answer: Option B
B. Abnormal Profit
Explanation
Short-run is a period where some factors are fixed and some are variable.
The short-run monopoly sells OM output at MP (OB) price. The total monopoly profits are AP × CA = CAPB is shaded in the diagram.
CAPB indicates the Abnormal profit of the monopolist.
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