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Pure monopolists may obtain economic profits in the long run because:

A) of advertising.

B) of barriers to entry.

C) marginal revenue is constant as sales increase.

D) of rising average fixed costs

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Divya Singh
Divya SinghLv10
12 Oct 2020

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Related questions

Why is marginal revenue below average revenue for a monopolist?

a) Because monopolists restrict output to raise the price.

b) Because monopolists charge higher prices than perfect competitors.

c) Because monopolists charge prices that are higher than their marginal costs.

d) To sell an additional unit, the monopolist has to reduce the price not only to the marginal buyer but to all buyers.

In a perfectly competitive industry, economic profit:

A. Can persist in the long run because of barriers to entry.

B. Can persist in the long run because of homogeneous products.

C. Will approach zero in the long run as prices are driven to zero.

D. Will approach zero in the long run as prices are driven to the level of average production costs.

 

D. Will approach zero in the long run as prices are driven to the level of average production costs.

Since the long-run profit-maximizing condition is the minimum of Long-run average total cost=Marginal Cost=Price, the firm earns zero economic profit in the long run.

1. Average costs curves initially fall

a. Due to declining average fixed costs

b. Due to rising average fixed costs

c. Due to rising fixed costs

d. Due to rising marginal costs

2. Marginal productivity is

a. The total output associated with total inputs

b. The total output associated with extra inputs

c. The extra output associated with total inputs

d. The extra output associated with extra inputs

3. If long-run average costs are constant with respect to output, you have

a. Increasing returns to scale

b. Decreasing returns to scale

c. Constant returns to scale

d. None of the above

4. If long-run average costs fall with output, you have

a. Increasing returns to scale

b. Decreasing returns to scale

c. Constant returns to scale

d. None of the above

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