A Monopoly May Be Able to Earn Profits Greater Than

Multiple Choice

A monopoly may be able to earn profits greater than a competitive firm because:

A) entry by new firms may be prevented.
B) government policies often ensure that certain industries such as utilities earn a guaranteed rate of return on their investment.
C) consumers are unaware of the existence of such profits and unwittingly pay the higher price.
D) The above statement is False. In the long run a monopoly earns the same profit as a competitive firm.