Why can a monopoly make a positive economic profit even in the long run?
What will be an ideal response?
Barriers to entry prevent the monopoly firm from enduring the pressure of competition, and allow it to choose the quantity of output that is associated with the profit-maximizing market price. This allows a monopoly firm to potentially enjoy positive economic profit, even in the long run.
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Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower
If consumer preference for a product increases, this will cause the equilibrium price of the product to go down, and the equilibrium quantity of the product to go u
Indicate whether the statement is true or false
A voluntary export restraint occurs when one country prevents a specific product from being imported from another country
Indicate whether the statement is true or false
If 2015 is the base year, the bundle price of goods in 2015 is $750, and the bundle price of goods in 2016 is $1,000, the 2016 price index is
A. 75. B. 125. C. 133.3. D. 166.7.