Home / Questions / Why does a monopolist’s total revenue eventually fall as it produces and sells more outp
Why does a monopolist’s total revenue eventually fall as it produces and sells more output?
2. Explain why monopolists do not achieve efficiency.
3. For the past three years, you have earned economic profits of $5,000 per year by being the only vendor
selling bottled tap water at your town’s Fourth of July celebration. When you go to city hall to apply for a
vending permit for this year’s celebration, the city clerk mentions that fifty new firms have received
permits to sell tap water this year.
a.What can you do to protect your economic profit in the short run?
b.What can you do to protect your economic profit in the long run?
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