Several Firms Want to Be the Only Horse Carriage Service

Multiple Choice

Several firms want to be the only horse carriage service in a small tourist town and must pay the city for a license to operate as a monopoly.Competition among the potential firms will result in

A) bidding up the price of the license so that the winning firm makes $0 economic profit.
B) the winning firm making an economic profit because it will be a price maker.
C) the winning firm making an economic profit because it will have no competition.
D) the winning firm making an economic profit because rent seeking cannot occur.
E) a $0 economic profit because monopolies are illegal.