Monopolies can maintain economic profits in the short and long run because of barriers to entry which prevent competitors from entering the market. A Monopolistic Competition market does not have barriers to entry so firms are free to enter and leave the market. This creates a situation where there is a long and short run similar to perfect competition. Graph the following: A graph showing: short run economic profit A graph showing: short run economic loss A graph showing: long run - normal profit (economic profit equal to zero)
Monopolies can maintain economic profits in the short and long run because of barriers to entry which prevent competitors from entering the market. A Monopolistic Competition market does not have barriers to entry so firms are free to enter and leave the market. This creates a situation where there is a long and short run similar to perfect competition. Graph the following: A graph showing: short run economic profit A graph showing: short run economic loss A graph showing: long run - normal profit (economic profit equal to zero)
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Graph the following:
- A graph showing: short run economic profit
- A graph showing: short run economic loss
- A graph showing: long run - normal profit (economic profit equal to zero)
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