Why can a monopoly earn economic profits in the long run?
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.
You might also like to view...
Refer to Figure 28-2. Suppose the Fed used contractionary policy to push short-run equilibrium to point C. If the short-run equilibrium remained at point C long enough
A) the short-run Phillips curve would shift up. B) the economy would stay at point C in the long run. C) the economy would move back to point A. D) the short-run Phillips curve would shift down.
Inflation reduces the return to capital gains _____
a. only on large assets such as houses b. because people have to pay taxes on nominal capital gains c. when tax rates on capital gains are high d. only under hyperinflation
Which of the following statements is true?
a. A tariff is a physical limit on the quantity of a good allowed to enter a country. b. An embargo is a tax on an imported good. c. A quota is a law that bars trade with another country. d. When a nation exports more than it imports it is running a balance of trade surplus.
The MR schedule can be obtained from the TR schedule by:
a. adding two successive values in the TR schedule. b. subtracting the succeeding TR value from the preceding TR value. c. subtracting the preceding TR value from the succeeding TR value. d. multiplying two successive TR values. e. dividing the succeeding TR value by the preceding TR value.