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Maximum attainable profits a firm can make are generally higher than the maximum earned profits. Under...

Maximum attainable profits a firm can make are generally higher than the maximum earned profits. Under what situations can a monopolists maximum earned profits be the same as maximum attainable profits? When the two profits are the same is the output Pareto efficient?

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Answer #1

A monopolists attainable profit is same as earned profit as, the seller is the firm itself, he has all the control over the production and supply of the product in the market,. He has the most possibility to get attainable profit, becaue no close substitute of the product. So the buyers are forced to buy the product even In high price. The out put is pareto efficient. It means the product will be charged a high price withoit affectng the price of othet product.  

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