If a single-price monopoly is making a large economic profit, what keeps other firms from competing away the profit?
A) The monopoly must be keeping the amount earned secret.
B) The existing firm's ATC must be too large to allow competitors to enter and earn an economic profit.
C) There are barriers to entry.
D) The market must be too small.
E) Nothing, other firms will enter and will compete away the profit.

Question

Quizplus · Accepted Answer

Barriers to entry, such as patents, economies of scale, and government regulations, prevent other firms from entering the market and competing away the economic profit of the monopoly.

If a Single-Price Monopoly Is Making a Large Economic Profit