A Monopoly Is Able to Continue to Generate Economic Profits

question 25

Multiple Choice

A monopoly is able to continue to generate economic profits in the long run because

• A) It can control both price and output in the market.
• B) potential competitors sometimes don't notice the profits.
• C) the monopolist is financially powerful.
• D) Antitrust or competition laws eliminate competitors for a specified number of years.
• E) there is some barrier to entry to that market.

Understand the implications of production functions on marginal and average costs.

Evaluate the impact of fixed costs on production decisions and break-even analysis.

Analyze the implications of different technological choices in a perfectly competitive market.

Calculate the break-even level of output based on total costs and price per unit.

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Definitions:

Secret Strategy

A confidential plan or method employed by an organization to gain a competitive advantage.

Good Management Practices

A set of actions, methods, and procedures used by managers to effectively lead their teams and achieve organizational goals.

Chain of Command

The hierarchy within an organization that establishes authority and responsibility, dictating how instructions are passed down and how issues are escalated.

Specialization of Labor

The division of labor into specific tasks and roles, aimed at increasing efficiency and productivity in the workforce.