In order for a firm to receive monopoly profits, there must be
A) homogeneous products.
B) barriers to market entry.
C) mutual interdependence among firms.
D) free entry and exit to the market.

Question

Quizplus · Accepted Answer

Barriers to market entry are necessary for a firm to receive monopoly profits as they limit competition, allowing the monopolist to set prices above the competitive level. Homogeneous products (A) and mutual interdependence among firms (C) are more relevant for oligopolies, while free entry and exit to the market (D) are associated with competitive markets where firms cannot earn above-normal profits in the long run.

In Order for a Firm to Receive Monopoly Profits, There