Question

Which market characteristic implies that long run profits can be greater than zero?

A. high barriers to entry
B. many, small buyers and sellers
C. differentiated products
D. perfect information
E. "Not at the table, Carlos!"

Answer 1

High barriers to entry in a market imply that long-run profits can be greater than zero.

Step-by-step explanation:

The market characteristic that implies that long-run profits can be greater than zero is A. high barriers to entry. Barriers to entry are the legal, technological, or market forces that discourage or prevent potential competitors from entering a market. When these barriers are high enough, monopolies can form and earn significant economic profits. Examples of barriers to entry include patents, licenses, and limited resources.