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Author Question: Can an unregulated monopoly make an economic profit in the long run? Explain your answer. What ... (Read 54 times)

panfilo

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on: Jun 29, 2018
Can an unregulated monopoly make an economic profit in the long run? Explain your answer.
 
  What will be an ideal response?

Question 2

What is the relationship between marginal cost and fixed cost?
 
  What will be an ideal response?


Edwyer

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Reply #1 on: Jun 29, 2018
Answer to Question 1

An unregulated monopoly can make an economic profit in the long run. The fact that the monopoly is protected by a barrier to entry allows the firm to make an economic profit in the long run. If the monopoly is making an economic profit, other competitors want to enter the market but the barrier to entry keeps them out.

Answer to Question 2

There is no relationship between marginal cost and fixed cost. Marginal cost examines the change in total costs from a change in output. Fixed costs remain the same even when output changes.


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