Why Can a Monopoly Make an Economic Profit in the Long

question 208

Multiple Choice

Why can a monopoly make an economic profit in the long run?

• A) because there are close substitutes for the firm's product
• B) because the firm is protected by barriers to entry
• C) because the firm produces where MR=MC
• D) because P > MR
• E) All of the above are reasons why a monopoly can make an economic profit in the long run.

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Definitions:

Negative Slope

Negative slope indicates a decrease in the variable on the y-axis as the variable on the x-axis increases, often seen in graphs representing inverse relationships.

Positive Slope

A line or curve on a graph that moves upwards from left to right, indicating a positive relationship between two variables.

Variable on the Vertical Axis

In a graph, the variable that is represented on the vertical (y) axis, which is typically the dependent variable in an analysis.

Variable on the Horizontal Axis

Represents independent variables in graphical representations, typically plotted along the x-axis.