Question

Which of the following is a characteristic of a monopoly but not a characteristic of a perfectly competitive market?
A) A monopoly is a price-taker.
B) A monopoly produces an efficient level of output
C) A monopoly may earn long-run economic profits.
D) A monopoly has no market power.

Answer 1

Answer:

C) A monopoly may earn long-run economic profits.

Explanation:

A monopoly earn long-run profits because of the exitence of high barries to the entry of the competence, therefore the monopolist avoid such competition and continue making long run economics profits.