A Monopolist Can Make an Economic Profit in the Long

question 486

Multiple Choice

A monopolist can make an economic profit in the long run because of

• A) the relatively elastic demand for its product.
• B) the relatively inelastic demand for its product.
• C) the firm's price setting behavior.
• D) barriers to entry.

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Definitions:

Acquired Assets

Assets obtained through purchase or merger by a company.

Double-Declining Balance

An accelerated method of depreciation that doubles the rate at which an asset's book value is reduced over time, reflecting quicker loss of value.

Straight-Line Depreciation

A technique for apportioning the price of a physical asset over its effective duration in steady annual portions.

Salvage Value

The expected salvage value of an asset after it has served its useful life.