A monopolist may be able to maintain long-run positive profit due to: A

Marketing Jan 12, 2021

A monopolist may be able to maintain long-run positive profit due to:

A. dead-weight loss.

B. economies of scale in production.

C. a price that is set equal to average total cost.

D. perfectly elastic demand for the product.

E. entry of new firms that keep the price high.

Expert Solution

The correct option is:

B. economies of scale in production.

Monopolist enjoys overwhelming cost advantages because of economies of scale and large scale production. This enables them to reap profits in the long run.

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