Which of the following statements is true?
A)A monopolist can charge whatever price it wants without losing any customers, by virtue of its monopoly position.
B)A monopolist may be able to increase its profits by increasing its price.
C)In the monopoly market structure, there are low barriers to entry.
D)A monopolist is assured of positive economic profits.

Question

Quizplus · Accepted Answer

A monopolist can potentially increase its profits by increasing its price, but it also runs the risk of losing customers to substitute goods or encouraging new competitors to enter the market. Low barriers to entry are not typically associated with monopoly market structures, as a lack of competition often leads to high barriers of entry for new firms. A monopolist may earn positive economic profits in the short run, but in the long run, competitors may enter or the market may change, leading to lower profits or losses.

Which of the Following Statements Is True