Question

The monopolist, unlike the perfectly competitive firm, can continue to earn an economic profit in the long run because of: Group of answer choices collusive

a. agreements with competitors.
b. price leadership. cartels.
c. a dominant firm.
d. extremely high barriers to entry.

Answer 1

Answer: d. extremely high barriers to entry.

Explanation: A monopolist is one who has a monopoly on something. A monopolist therefore exclusively provides a particular product or service, dominating the market and generally exerting powerful control over it. A monopoly offers a unique product or service and presents high barriers to prevent competition. As a result, unlike the perfectly competitive firm, can continue to earn an economic profit in the long run because of extremely high barriers to entry.