Because of a patent, Alcoa is the only manufacturer of soda cans with a stay-put tab. Alcoa can earn a profit on the sale of soda cans with stay-put tabs
A. in the long run because entry into the industry by new firms is blocked until the patent expires.
B. only in the long run because government regulations prevent monopolists from earning profits in the short run.
C. in the short run but not in the long run because new firms will enter the industry in the long run.
D. in the long run but not the short run because the monopolist will face competition in the short run.
Answer: A
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Universities are able to act as monopsonists in the market for professors because
A) a university usually does not consider hiring faculty members from another institution. B) faculty members usually have to move to a different city when changing universities. C) students like all of their professors. D) senior faculty members are willing to move to a new university at any cost.
Which of the following would constitute contractionary monetary policy by the Fed?
a. An increase in income tax rates, a cut in government spending, and an elimination of the investment tax credit b. Open market sales of government securities, an increase in the discount rate, and an increase in reserve requirements c. An increase in tariffs on imported goods and a decrease in foreign aid d. Open market purchases of government securities, a cut in the discount rate, and an increase in reserve requirements
Which of the following will shift the production possibilities curve outward?
a. a decrease in the market price of both goods b. an increase in the unemployment rate c. a hurricane that destroys buildings throughout Florida d. an increase in the capacity utilization of existing factors
When will a profit-maximizing firm shut down?
a. when ATC x q is more than VC b. when ATC x q is less than VC c. when P x q is more than VC d. when P x q is less than VC