The main reason(s)monopolies can earn positive profits for a while is(are)
A)assets cannot quickly move in and out of the industry when demand fluctuates
B)an increase in demand does not lead to entry of firms to absorb the extra demand
C)both A&B
D)none of the above

Question

​The main reason(s)monopolies can earn positive profits for a while is(are)
A)​assets cannot quickly move in and out of the industry when demand fluctuates
B)an increase in demand does not lead to entry of firms to absorb the extra demand
C)both A&B
D)​none of the above

Quizplus · Accepted Answer

Monopolies can earn positive profits for a while because of the combination of factors A and B. Assets cannot easily move in and out of the industry, which reduces the threat of new entrants, and an increase in demand does not lead to the entry of new firms that could absorb the additional demand. This lack of competition allows monopolies to maintain higher prices and earn positive profits in the long run.

​The Main Reason(s)monopolies Can Earn Positive Profits for a While

The Main Reason(s)monopolies Can Earn Positive Profits for a While