In a monopoly in the long run:
A)economic profits will be eliminated by the entry of rival firms.
B)economic profits will be reduced but not eliminated by the entry of rival firms.
C)entry by other firms will not occur.
D)the price will be the same as if the market were perfectly competitive.

Question

Quizplus · Accepted Answer

Monopolies have no close substitutes and can restrict quantity sold to increase price and generate economic profits. Since entry by other firms is not possible, the monopoly price and profit level can persist in the long run.

In a Monopoly in the Long Run