If a monopoly firm is continually earning above-normal profits, then
a. the entry of new firms will reduce profits to normal in the long run
b. the profits may remain above-normal in the long run despite the entry of new firms
c. market forces other than the entry of new firms will reduce profits to normal in the long run
d. falling market demand due to the firm's high prices will reduce profits to normal in the long run
e. barriers to entry may enable the profits to remain above-normal in the long run
E
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Explain why gold, despite its value, is difficult to use as a medium of exchange
What will be an ideal response?
A British waste management company acquired two other companies that specialized in disposal of hazardous wastes even though the two companies were losing money. Planning and regulatory requirements in the United Kingdom make it difficult for firms to establish new hazardous waste landfills, and the combined companies would control most hazardous waste landfills in some parts of the country. How do the planning and regulatory requirements affect the market for hazardous waste?
A. They create a burden on the company, and so it probably will lobby to repeal them. B. They help the merged companies because it will be expensive for other firms to enter the market to compete with them. C. They make the market for hazardous waste disposal into a monopolistically competitive market. D. They make the market for hazardous waste disposal into a contestable market.
Which of the following is not a source of productivity gain?
A. Technological advance. B. Higher skills. C. Improved management. D. Economic growth.
The root of the savings and loan debacle was
A. the corruption of management. B. the low rates of interest paid to the depositors. C. long term (30-year) outstanding loans at extremely low interest rates. D. high risk short term loans.