Can an unregulated monopoly make an economic profit in the long run? Explain your answer
What will be an ideal response?
An unregulated monopoly can make an economic profit in the long run. The fact that the monopoly is protected by a barrier to entry allows the firm to make an economic profit in the long run. If the monopoly is making an economic profit, other competitors want to enter the market but the barrier to entry keeps them out.
You might also like to view...
Wage reduction policies are less common than layoffs because
A) workers never prefer wage reduction policies. B) workers always trust the firm to tell the truth. C) of asymmetric information. D) of adverse selection problems.
If Taiwanese workers can produce all goods at lower wages than American workers, then
a. Americans can still gain by trading with Taiwan. b. Americans can only lose if they import from Taiwan. c. Taiwan can only lose if it trades with America. d. there are no gains from trade that are possible in this case. e. Americans should be self-sufficient.
Which of the following problems would lead an economist to use instrument variable methods?
A) The dependent variable has an impact on the independent variable. B) There are too few quarters of data. C) There are too many independent variables. D) The R2 is too high. E) The residuals are too small.
Those with more inelastic demands will bear a larger burden of a tax because they:
A. will switch to other products with a tax. B. have more buying power. C. have more income. D. have fewer substitutes for that good.