Monopolists earn ______ profits in the long run.
A) normal
B) above-normal
C) below-normal
D) abnormal

Question

Quizplus · Accepted Answer

Monopolists can earn above-normal profits in the long run because they have the ability to restrict output and charge higher prices than in a competitive market. This allows them to earn economic profits, which are above the normal rate of return. However, these profits may attract new firms to enter the market, leading to increased competition and potential long-term loss of market power.

Monopolists Earn ______ Profits in the Long Run