In the Long Run, Which of the Following Is Not

question 191

Multiple Choice

In the long run, which of the following is not a problem for a monopolist earning economic profit?

• A)other firms have an incentive to create substitutes for the monopolist's product
• B)technological change tends to break down barriers to entry
• C)patents expire, licenses must be renewed, and new sources of essential resources may be discovered
• D)government often decides to regulate monopolies
• E)all profit will gradually be converted to consumer surplus

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Definitions:

Cost Center

A part of an organization that does not directly add to profit but incurs costs, such as the customer service department.

Profit Center

A branch or division of a company that is treated as a separate entity for the purpose of revenue and profit calculation, allowing for better management and financial analysis.

Profit Center

A part or division of a business that is directly responsible for generating its own revenue and profit, allowing for assessment of performance.

General Expenses

Broad category of costs that are associated with the daily operations of a business but are not directly tied to production.