Can a monopoly make an economic profit in the long run? Explain your answer
What will be an ideal response?
A 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...
The conversion of a barter economy to one that uses money
A) increases efficiency by reducing the need to exchange goods and services. B) increases efficiency by reducing the need to specialize. C) increases efficiency by reducing transactions costs. D) does not increase economic efficiency.
Use the following statements to answer this question: I. An increase in the firm's fixed costs will also shift the firm's short-run supply curve to the left. II
An increase in the firm's fixed costs will not shift the firm's short-run supply curve to the right or left, but it may alter how much of the marginal cost curve is used to form the short-run supply curve. A) I and II are true. B) I is true and II is false. C) II is true and I is false. D) I and II are false.
The demand curve for money
a. shows the amount of money balances that individuals and businesses wish to hold at various interest rates. b. reflects the open market operations policy of the Federal Reserve. c. shows the amount of money that individuals and businesses wish to hold at various price levels. d. reflects the discount rate policy of the Federal Reserve.
Suppose an economist advises a city's mayor to begin charging drivers a fee to drive on a busy highway during congested times. The mayor does not implement the policy because it would not be popular with voters. Which of the following statements best describes the scenario?
a. This is a common occurrence. The policymaker knows the best policy but chooses not to institute it for other reasons. b. This is a common occurrence. The policymaker usually disregards an economist's advice because they do not believe it is the most efficient policy. c. This is an unlikely occurrence. Most of the time, policymakers follow the advice of economists and institute the most efficient policies. d. This would never happen. Policymakers always follow the advice of economists.