Pure monopolists may obtain economic profits in the long run because:
A. of advertising.
B. marginal revenue is constant as sales increase.
C. of barriers to entry.
D. of rising average fixed costs.
Answer: C
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A payoff matrix summarizes all of the following except
A) who the players are. B) the reason each player is playing the game. C) the actions available to each player. D) the payoffs available to each player.
For a firm in a perfectly competitive market, if it produces where marginal cost exceeds marginal revenue it:
A. should cut back production to increase profits. B. should increase production to increase profits. C. is producing a profit-maximizing quantity. D. is impossible to tell if it is actually maximizing profits.
The difference between black market and gray market activities is:
A. while neither are included in GDP, black market items are illegal and gray market items are not. B. while neither are include in GDP, gray market items are illegal and black market items are not. C. black market items are very rare and difficult to find, and gray market items are more commonplace, like babysitting. D. black market items are typically expensive items, and gray market items are not.
The government’s role in a laissez-faire system includes
A. determining market prices B. constructing and maintaining roads and infrastructure C. determine the levels of profits earned by firms D. impose minimum wages