In the long run, the main reason that a monopolist can earn positive economic profits while a perfectly competitive firm cannot is:
A)monopolists enjoy greater economies of scale.
B)there are no barriers to entry in a perfectly competitive market.
C)the monopolist faces an inelastic demand for its product.
D)perfectly competitive firms face greater opportunity costs.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, the absence of barriers to entry allows new firms to enter when existing firms earn positive economic profits, driving profits to zero in the long run. Monopolists, however, are protected by barriers to entry, allowing them to maintain positive economic profits.

In the Long Run, the Main Reason That a Monopolist