Concept Checker 2 Schweser Rno 18 i)when MC is less than price, firm will definitely be incurring loss, but ii) when MC is less than AC, wont there necessarily be a loss? Schweser says no to (ii). I understand that in perfect competition, MC=MR=Price, at equilibrium .So, if (i) is true, (ii) must also be true. Am i missing something here? PS:Also, there are not many threads on econ on this forum, i think. Is it coz you guys think it is easier?
I don’t have access to Schweser right now. Econ is not easier. Not sure why there aren’t too many questions on the board relating to Econ. There were a lot last time around. Use the search function.
This is because for a monopolist, Price>MC and for a firm in perfect competition, P=MC. Because P>MC for a monopolist, even if MC=AC. that’s why a monopolist doesn’t make losses when MC