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Homework answers / question archive / Discuss the profit maximizing position of a monopolist, in both the short run and long run
Discuss the profit maximizing position of a monopolist, in both the short run and long run.
Because monopolies are the only producers of a good or service, they do not need to worry about short-run profits being quickly evaporated. Therefore, these firms will take steps to maximize their profits in the long run, even if it means taking lower short-run profits and/or losses in the short run. For example, the firms can keep prices low in the short run to prevent other firms from entering the market so that they can keep profits high in the long run.