MonopolyProfits Thisdiagramshowsthatmonopolyprofitsdependontherelationshipbetweenthedemandandaveragecostcurves.Profitispositiveifmarketpriceexceedsaveragetotalcosts,butifpriceislowerthanaveragecosts,thenamonopo
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The monopoly might make an economic profit, even in the long run, because the barriers to entry protect the firm from market entry by competitor firms. A Single-Price Monopoly’s Output and Price Decision Figure 12.4 illustrates the profit-maximizing choices of a single-price monopoly. In part...
Finally, if long run average cost is constantly falling the least cost way to provide a good or service is through a single firm. Capital requirements: Production processes that require large investments of capital, or large research and development costs or substantial sunk costs limit the number...
Answer to: "If a monopoly retains its market power over the long run, it must be protected by barriers to entry." Explain. By signing up, you'll...
Why are monopoly firms able to earn long-run economic profits while perfectly competitive firms cannot? Why is society worse off under a monopoly than under perfect competition, even if both market structures face the same constant long-run average cost curve? What are the three reasons that a...
Why might a monopoly earn an economic profit in the long-run? How does it differ from the situation faced by a perfectly competitive firm? Explain. What are some advantages or disadvantages of a market caused by a monopoly? Can you use a diagram to explain why a monopoly, when compared ...
A firm can earn economic profits in the long run ___. (a) only when the market is a monopoly or monopolistically competitive (b) when the market is perfectly competitive, monopolistically competitive, or monopolistic (c) only when the market is a mono A firm...
Is profit likely to be eroded to zero in the long run (like in perfect competition)? Explain. Perfect competition and monopolistic competition both generate zero economic profits in the long run. Using a diagram for each, indicate whether the quantities...
What characteristic of a monopoly will most likely ensure economic profit in the long run? What are the characteristics and assumptions of a pure monopoly? What's the first thought that comes to mind when you hear "monopoly?" What's the effect on R&D if something like a monopoly exists?