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Questions and Answers
What do many people associate high profits with?
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?
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?
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?
Does a monopoly always earn positive profits?
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Should the government allow mergers that create a monopoly in a market that was suffering short-run losses?
Should the government allow mergers that create a monopoly in a market that was suffering short-run losses?
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