If a monopolist earns positive economic profits in the long run,
A) new firms will enter the market.
B) the monopolist expands production.
C) the industry supply curve shifts to the right.
D) the monopolist will not change its behavior.

Question

Quizplus · Accepted Answer

Monopolists, by definition, face no competition due to barriers to entry in their market, which prevents new firms from entering. Therefore, even if the monopolist earns positive economic profits in the long run, it doesn't lead to new firms entering the market, nor does it necessarily mean the monopolist will expand production or that there is an industry supply curve to shift (as the monopolist is the sole supplier).

If a Monopolist Earns Positive Economic Profits in the Long