A monopolist can earn economic profits in the long run because
A) a monopoly is by definition large, and this gives it the ability to make large profits.
B) a monopoly makes the good or service better than anyone else.
C) barriers to entry prevent new firms from entering the industry.
D) monopolies can legally force people to buy their products and to pay more for them than they are worth.
C
You might also like to view...
Explain why even the most affluent people, businesses and counties never solve the problem of scarcity
What will be an ideal response?
During the financial crisis of 2008, which company did not receive a loan from the Fed?
a. J. P. Morgan b. General Electric c. American International Group d. Bank of America
A government has the ability to use fiscal and monetary policy to mitigate the effects of economic fluctuations.
Answer the following statement true (T) or false (F)
Refer to the above diagram. A binding government-set price floor is best illustrated by:
A. price C. B. price A. C. quantity E. D. price B.