Which of the following statements about the differences between monopoly and perfect competition is INCORRECT?
A) A monopolist has market power, while a perfect competitor does not.
B) Unlike a perfectly competitive firm, a monopoly can make positive economic profits in the long run.
C) A monopoly will charge a higher price and produce a smaller quantity than a competitive market with the same demand and cost structure.
D) Monopoly profits can continue in the long run because the monopoly produces more and charges a higher price than a comparable perfectly competitive industry.

Question

Quizplus · Accepted Answer

Monopoly profits can continue in the long run due to barriers to entry, not because they produce more; they actually produce less and charge a higher price compared to a perfectly competitive industry.

Which of the Following Statements About the Differences Between Monopoly