The monopolist is able to gain super-normal profit in the long run. Ho

1.	The monopolist is able to gain super-normal profit in the long run. How?
Answer» Even in the long run, there is always a tendency to protect the extra profit for the monopoly firm. Entry into the industry is prohibited, due to the fact that no firm can enter the market, unlike the perfect competition. Thus, when a monopolist earns long lasting super-normal benefits, then no other producer can enter the market in hopes of sharing super general profit potential. Therefore, long-lasting super normal benefits also do not end. Lack of entry into the industry as well as lack of substitutes in the market means that the monopolist does not have an optimum size plant in the long-run or has to use it at optimum capacity. The monopolist will adjust his plant to the demand conditions in the market.

The monopolist is able to gain super-normal profit in the long run. How?

Answer»

Even in the long run, there is always a tendency to protect the extra profit for the monopoly firm. Entry into the industry is prohibited, due to the fact that no firm can enter the market, unlike the perfect competition. Thus, when a monopolist earns long lasting super-normal benefits, then no other producer can enter the market in hopes of sharing super general profit potential. Therefore, long-lasting super normal benefits also do not end.

Lack of entry into the industry as well as lack of substitutes in the market means that the monopolist does not have an optimum size plant in the long-run or has to use it at optimum capacity. The monopolist will adjust his plant to the demand conditions in the market.

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