If a monopolist with significant barriers to entry is making positive economic profit in the short run, what do we expect to happen as the market transitions to the long run? O The profit will increase since the monopolist has no competition, they can just raise the price to earn higher profits. It will decrease as positive economic profit signals new firms to enter the market, increasing the market supply, and lowering the prevailing price. It will increase, in the long run fırms will drop out the market increasing the monopolists dominance in the marketplace. The profit will stay the same, strong barriers to entry prevent new competition.

If a monopolist with significant barriers to entry is making positive economic profit in the short run, what do we expect to happen as the market transitions to the long run? O The profit will increase since the monopolist has no competition, they can just raise the price to earn higher profits. It will decrease as positive economic profit signals new firms to enter the market, increasing the market supply, and lowering the prevailing price. It will increase, in the long run fırms will drop out the market increasing the monopolists dominance in the marketplace. The profit will stay the same, strong barriers to entry prevent new competition.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter13: Monopoly And Antitrust

Section: Chapter Questions

Problem 7P

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