1 pts If a monopolist in an industry characterized by monopoly features is makin

Question

1 pts If a monopolist in an industry characterized by monopoly features is making economic profit in the short run, which of the following is true for this firm in the long run? (Assume that costs and demand are held constant) The mono The monopolist will make normal profit because no firms will enter the industry. The monopolist will make a loss. O D Question 6 1 pts Which of the following identifies a difference betwcen monopolics and cartels in oligopoly? ies are always itegat in the U.S bul Cartels are not

Explanation / Answer

1. If Monopolist in an industry is characterised by monopoly features is making economic profit in the short run ,because there are high barriers to entry and exit under monopoly, this implies that monopolist will be able to sustain economic profits. Hence, option(a) is correct.

2. Difference between monopoly and cartels in oligopoly is that monopolies generate more profits than carrtels in oligopoly. Under cartel the profit maximisation condition is the same as under monopoly but the members under cartel deviate, which generate the less profit than as under monopoly. Hence, option(c) is correct.

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