Because of a patent, Alcoa is the only manufacturer of soda cans with a stay-put tab. Alcoa can earn a profit on the sale of soda cans with stay-put tabs
A) in the short run but not in the long run because new firms will enter the industry in the long run.
B) only in the long run because government regulations prevent monopolists from earning profits in the short run.
C) in the long run but not the short run because the monopolist will face competition in the short run.
D) in the long run because entry into the industry by new firms is blocked until the patent expires.

Question

Quizplus · Accepted Answer

Alcoa's patent on the stay-put tab creates a barrier to entry, allowing it to maintain its monopoly and earn profits in the long run until the patent expires.

Because of a Patent, Alcoa Is the Only Manufacturer of Soda