Can a monopoly make an economic profit in the long run? Explain ...

[kaid0807]

Can a monopoly make an economic profit in the long run? Explain your answer.
 
  What will be an ideal response?

Question 2

Using the production possibilities frontier model, unemployment is described as producing at a point
 
  A) on the exact middle of the PPF curve.
  B) on either end of the PPF curve.
  C) inside the PPF curve.
  D) outside the PPF curve.

[kthug]

Answer to Question 1

A 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

C