Can a monopoly make an economic profit in the long run? Explain your answer
What will be an ideal response?
A monopoly can make an economic profit in the long run. The fact that the monopoly is protected by a barrier to entry allows the firm to make an economic profit in the long run. If the monopoly is making an economic profit, other competitors want to enter the market but the barrier to entry keeps them out.
You might also like to view...
The Employment Act of 1946: a. guaranteed full employment
b. allowed the federal government to hire as many people as it could to achieve full employment. c. gave the federal government the power to levy an income tax. d. imposed a responsibility on the federal government to promote maximum employment. e. obligated the federal government to run budget surpluses to achieve full employment.
Consider a market that is initially in equilibrium. If we observe that price increased and quantity decreased, then which of the following could have occurred?
a. demand increased b. supply increased c. supply decreased d. demand decreased e. both demand and supply increased