Sam Edison obtains a patent on his new invention: trinoculars.In the long run,
A)he can earn only a normal profit
B)he may suffer an economic loss and stop producing
C)his monopoly power guarantees him a positive economic profit
D)he will achieve productive efficiency
E)he will achieve allocative efficiency

Question

Quizplus · Accepted Answer

Just because Sam Edison obtains a patent on his new invention does not guarantee him a positive economic profit. He may face competition in the market, which could lead to lower demand and revenue or higher production costs. Therefore, he may suffer an economic loss and stop producing.

Sam Edison Obtains a Patent on His New Invention: Trinoculars