Question

A monopoly may continue to make economic profits in the long run because of barriers to entry.

a) True
b) False

Answer 1

A monopoly may continue to make economic profits in the long run due to barriers to entry.

Step-by-step explanation:

The statement is true. A monopoly can continue to make economic profits in the long run due to barriers to entry.

Barriers to entry are the legal, technological, or market forces that discourage or prevent potential competitors from entering a market. These barriers can range from simple and easily surmountable obstacles, such as the cost of renting retail space, to extremely restrictive ones.

For example, if a monopoly has exclusive rights to a limited resource or technology, it can prevent new competitors from entering the market, allowing the monopoly to maintain its market dominance and continue earning profits.