Compared to the purely competitive firm, a pure monopoly:
A) is able to use barriers to entry and maintain positive economic profits in the long run.
B) produces an equal amount of output but charges higher prices to cover all costs in the market.
C) is efficient from society's perspective because it has big plants and it uses the newest possible production technology.
D) will always become competitive in the long run because positive economic profits will induce competitors into the market.

Question

Quizplus · Accepted Answer

A pure monopoly can maintain positive economic profits in the long run due to barriers to entry, which prevent other firms from entering the market and competing away profits.

Compared to the Purely Competitive Firm, a Pure Monopoly