In the presence of competitive pressures and low-entry barriers, competition would eliminate economic profit in the long run. Legal restrictions, economies of scale, and control of an essential resource are the common sources of barriers to entry. Monopoly exists when there is a single producer ...
Under what circumstances can a firm operating in monopolistic competition make an economic profit in the long run? Explain the long run economic profit earned by each of the four: -perfect competition, -monopolistic competition, -oligopoly and -monopo...
A) Profit equals zero at all times B) Profit can be positive in the long run only C) Profit can be positive in the short run only D) Profit can be positive in both the short run and lon If the market is a monopoly market, how ...
In a perfectly competitive market, the forces of entry would erode this profit in the long run. But a monopolist is protected by barriers to entry. In fact, one telltale sign of a possible monopoly is when a firm earns profits year after year, while doing more or less the same thing, ...
8 Demandandmarginalrevenuecurves 9 Profitmaximisation •Economistsassumethatallfirmstrytomaximiseprofits(orminimiselosses).•Liketheperfectlycompetitivefirm,themonopolistalsomaximisesprofitbyproducingthatlevelofoutputforwhichMR=MC.10 Monopolyintheshortrun 11 ...
Market Expansion: Exploiting economies of scale to lower costs and increase profit margins. Regulation: Government intervention to prevent abuse of market power and protect consumer interests. Examples of Monopoly Utilities: Local electricity or water companies that are the sole providers in their regions...
perfect competition is characterized by price-taking behavior, monopolies have significant market power which enables them to dictate a price which is significantly higher than theirmarginal cost. Due to extensive barriers to entry, a monopolist can earn positive economic profit even in the long-run...
24. During the life of a drug patent, the monopoly pharmaceutical firm maximizes profit by producing the quantity at which marginal revenue equals marginal cost. ANS: T DIF: 1 REF: 15-2 NAT: Analytic LOC: Monopoly TOP: Profit maximization MSC: Interpretive 25. The socially efficient quantity...
Earns a profit in the long run and short run 一个垄断企业如果不被regulated,它将会减少consumer surplus,增加它的producer surplus,CS的损失>PS的增加,因而导致Deadweight loss 因为在垄断企业选择的生产点时候,产出减少,所以有无谓损失,P>MC;价格大于边际成本;Thus,mutually beneficial transaction go unmade;因而...
the forces of entry would erode this profit in the long run. However, a monopolist is protected by barriers to entry. In fact, one obvious sign of a possible monopoly is when a firm earns profits year after year, while doing more or less the same thing, without ever seeing increased com...