If a single-price monopoly is making a large economic profit,what keeps other firms from competing away the profit?
A) There are barriers to entry.
B) The monopoly must be keeping the amount earned secret.
C) The market must be too small.
D) The existing firm's ATC must be too large to allow competitors to enter and earn an economic profit.
E) Nothing, other firms will enter and will compete away the profit.

Question

Quizplus · Accepted Answer

If a single-price monopoly is making a large economic profit, it is likely because there are barriers to entry that prevent other firms from entering the market and competing away the profit. These barriers could include things like high start-up costs, legal restrictions, or exclusive access to important resources. Without these barriers, other firms would have an incentive to enter the market and offer lower prices, ultimately leading to the elimination of economic profit.

If a Single-Price Monopoly Is Making a Large Economic Profit,what