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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Refer to Figure 10.3. A decrease in the real interest rate, with no other changes that affect aggregate expenditure, is best represented by ________ in panel (a) and ________ in panel (b)
A) a shift from AE3 to AE2; a shift from IS2 to IS1 B) a shift from AE2 to AE3; a shift from IS1 to IS2 C) a shift from AE1 to AE2; a movement from point A to point B D) a shift from AE1 to AE3; a movement from point A to point C
The major factor affecting a nation's balance of payments is
A) an increase in its rate of unemployment. B) its rate of inflation relative to the rate of inflation of its trading partners. C) a change in the productivity of its labor. D) its stock market movements.