Why can a monopoly make an economic profit in the long run?
A) because there are close substitutes for the firm's product
B) because the firm is protected by barriers to entry
C) because the firm produces where MR=MC
D) because P > MR
E) ALL of the above are reasons why a monopoly can make an economic profit in the long run.
B
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If Lisa spends her income on veggie burgers and pints of soy milk and the price of veggie burgers is three times the price of a pint of soy milk, then when Lisa maximizes her utility she will buy
A) three times as many pints of soy milk as veggie burgers. B) both goods until the marginal utility of veggie burgers is three times the marginal utility of soy milk. C) three times as many veggie burgers as pints of soy milk. D) both goods until the marginal utility of a pint of soy milk is three times the marginal utility of veggie burgers.
Which of the following statements about the foreign exchange market is not true?
a. The exchange rate setting depends on the exchange rate regime a nation chooses. b. When a central bank intervenes in the foreign exchange market, it also affects the nation's monetary base. c. The elasticities of an economy's supply and demand for foreign exchange determine the exchange rate volatility. d. Flexible exchange rates increase the business risks associated with exchange rate movements. e. Fixed exchange rates decrease the business risks associated with changes in a nation's money supply.