Sizable economic profits can persist over time under monopoly if the monopolist
A)produces that output where average total cost is at a maximum.
B)is protected by barriers to entry.
C)operates as a price taker rather than a price maker.
D)earns revenues that exceed variable costs.

Question

Quizplus · Accepted Answer

Barriers to entry can prevent new firms from entering the market and competing away profits, allowing the monopolist to maintain its market power and earn economic profits over time. Options A, C, and D do not guarantee the persistence of economic profits in a monopoly.

Sizable Economic Profits Can Persist Over Time Under Monopoly If