The monopolist, unlike the perfectly competitive firm, can continue to earn an economic profit in the long run because of:
A) collusive agreements with competitors.
B) price leadership.
C) cartels.
D) a dominant firm.
E) extremely high barriers to entry.

Question

Quizplus · Accepted Answer

The monopolist can continue to earn economic profits in the long run because of extremely high barriers to entry. These barriers can include legal protections, technological advantages, control over essential inputs, or economies of scale. These barriers prevent potential competitors from entering the market and limit competition, allowing the monopolist to maintain its market power and charge a higher price. As a result, even in the long run, the monopolist can continue to earn economic profits.

The Monopolist, Unlike the Perfectly Competitive Firm, Can Continue to Earn