5 Questions
What do many people associate high profits with?
Many people associate high profits with monopoly or too little competition, normal profits with competition, and losses with excessive competition.
What does the text say about the beliefs associated with profits and competition?
The text states that although each of these beliefs has some element of truth, none is correct.
Is anyone who earns positive profits a monopoly?
No, although a monopoly may earn positive profits, it does not follow that any firm that earns a positive profit is a monopoly.
Does a monopoly always earn positive profits?
No, a monopoly does not always earn positive profits.
Should the government allow mergers that create a monopoly in a market that was suffering short-run losses?
The text does not provide a direct answer to this question.
Test your understanding of profits and monopoly with this quiz. Explore the relationship between profits and competition by answering three key questions. See how well you grasp the concepts of monopoly and competition in relation to profits.
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