Which of the Following Statements Is True

Which of the following statements is true?

A) One reason a monopoly can earn economic profits is because it can raise price and restrict output.
B) A perfectly competitive firm can earn economic profits because it can raise price and restrict output.
C) Income is transferred from producers to consumers in a monopoly compared to perfect competition.
D) Monopolists who price-discriminate rarely earn positive economic profits in the long run.
E) A monopolist misallocates resources because P = MC.

Correct Answer:

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