A monopoly may continue to make economic profits in the long run because of the barriers to entry in its industry.

Question

Quizplus · Accepted Answer

A monopoly can maintain its market power and continue to earn economic profits in the long run due to the presence of barriers to entry, which prevent new firms from entering the market and competing away the monopoly's profits. Examples of barriers to entry include high start-up costs, control over key resources or technology, government regulations, and network effects.

A Monopoly May Continue to Make Economic Profits in the Long