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.

Understand the relationship between income, consumption of goods, and leisure in utility maximization.

Interpret the graphical representation of indifference curves and budget constraints.

Analyze the impact of wage changes on hours worked and goods consumed.

Understand the concept of perfect complements in consumption.

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Definitions:

Product-Level Activity

Activities or tasks that are directly associated with specific products and typically vary with the number of product units produced.

Factory Security

Measures and procedures implemented to protect a manufacturing or industrial facility from unauthorized access and to ensure the safety of employees and assets.

Assembly Activities

Processes involved in putting together components to create a finished product.

Appliance Manufacturing

The process of producing household machines that perform specific tasks, such as cooking or cleaning.