Discussion
In short run, a monopoly firm can make:
Answer: D
A monopoly firm is not protected from losses by its market power. In the short run it may make super normal profit, normal profit or a loss, depending on where its demand curve lies relative to its average cost curve. So all three outcomes are possible, and the correct option is the one that lists all of them. The answer is option D. Whether it earns profit depends on the position of the demand curve relative to the average cost curve.
In the long run a monopoly that makes losses leaves the market, so only normal or super normal profit can last, while the short run allows all three.
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