Why can a monopoly earn economic profits in the long run?
What will be an ideal response?
Because a monopoly experiences very strong barriers to entry, keeping potential competitors out of its market, it can earn economic profits in the long run. Barriers to entry may include economies of scale, financial and technological barriers to entry, sole ownership over a strategic resource, and even government laws and regulation.
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"If Ivan says he is indifferent between the consumption of a new pair of jeans or a set of earrings, he means that he does not want either product." Is the previous analysis CORRECT? Explain your answer
What will be an ideal response?
Select the phrase that correctly completes the following statement. "A positive change in technology caused an increase in the supply of flat-screen televisions. As a result ________."
A) the price of flat-screen televisions decreased. The lower price caused the supply of flat-screen televisions to decrease B) the equilibrium quantity of flat-screen televisions decreased C) the price of flat-screen televisions decreased and the demand for flat-screen televisions increased D) the price of flat-screen televisions decreased and the quantity demanded of flat-screen televisions increased
In an economy, the portion of household spending that occurs independent of household income is known as
A) autonomous consumption. B) dissavings. C) the marginal propensity to consume. D) the consumption function.
The Farm Factory, a booth at the local Farmer's Market, sells fresh eggs for $1.50 per dozen and fresh milk for $2.50 per gallon. What is the opportunity cost of buying a gallon of milk?
A) 1 2/3 dozen eggs B) 3/5 of a dozen eggs C) $2.50 D) $1.50