Monopoly in the Long-Run In the discussion of a perfectly competitive market structure, a distinction was made between short‐run and long‐run market behavior. In the long‐run, all input factors are assumed to be variable, making it possible for firms to enter and exit the market. read more
So sometimes they may just incur the loss if a monopoly is still able to pay if it's AVC (average variable costs) then while making a loss means that they can still operate in the short run. read more
In a competitive market, firms may produce quantity Q2 and have average costs of AC2. A monopoly can produce more and have lower average costs. This enables efficiency of scale. Related. Monopolistic competition – where the short run equilibrium is different to the long run equilibrium; Monopoly – advantages and disadvantages. read more