A monopoly firm can operate at three different points: earning economic profits by charging a price above costs, operating at a loss by charging a price below costs, or breaking even where price equals costs. A perfectly competitive firm can also experience economic profits, losses, or break even depending on whether total revenue exceeds, is less than, or equals total costs. For a monopoly, the socially optimum price is one that covers costs plus a reasonable profit, while the fair return price allows recovery of normal costs of production.

1. illustrate a monoply with economic profits, with a loss, break-even.
illustrate a Perfectly competltive firm with economic profits ,with a loss, beak-even
illustrate a Monpoly with socially optimum price and fair return price
Solution
monopoly is a market where there is only one seller and many buyers, usually monopoly market
will be regulated by concern nation governments, and they dont run at losses. monopolist will
charge a price where he can cover all his expenses and costs, and runs for profit.
perfectly competitive market is an imaginary market, which not exists in any real econimies. but
this is the base to analyse the other markets. when total revenue exceeds total cost, at the place
these firms gets profits, and below the point they will get losses. and the intersecting point is
called Break Even Point.
a monopolist only charge, his manufacturing cost plus minimum and reasonable profit on it.