A monopoly firm exhibits all of these characteristics EXCEPT

Question

Quizplus · Accepted Answer

A monopoly can earn economic profits in the long run due to significant barriers to entry (A and B are true). Its individual demand curve is the market demand curve because it is the only seller in the market (C is true). However, for a monopoly, the marginal revenue curve does not equal the price at all quantities because it faces a downward-sloping demand curve, meaning it must lower its price to sell more units, causing marginal revenue to be less than price (D is false).

A Monopoly Firm Exhibits All of These Characteristics EXCEPT