In the Monopoly Market Structure, New Firms

question 142

Multiple Choice

In the monopoly market structure, new firms

• A)cannot profitably enter the industry, even in the long run
• B)may freely enter and leave the industry in both the short run and the long run
• C)may freely enter and leave the industry in the long run only
• D)may freely enter and leave the industry in the short run only
• E)have no incentive to enter the industry, even if economic profits are present

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Definitions:

Industry Supply

The total output of goods or services available from a particular industry at a given price level and time.

Operate

To function or run, typically referring to the way machinery, systems, or businesses work.

Shut Down

Cessation of a firm’s operations as output falls to zero.

Break-even Point

The level of production or sales at which total revenues equal total expenses, resulting in neither profit nor loss.