If the North American newsprint paper market has barriers to entry, then
A. abnormally high profits will attract the entry of new firms.
B. the entry of new firms will eventually cause price to decline.
C. surviving firms earn only a normal level of profit in the long run.
D. entry will be blocked even if firms are earning high profits.
Answer:D
If the North American newsprint paper market has barriers to entry, then
A. abnormally high profits will attract the entry of new firms. B. the entry of new firms will eventually cause price to decline. C. surviving firms earn only a normal level of profit in the long run. D. entry will be blocked even if firms are earning high profits.
Explanation: 16. A natural monopoly occurs when the quantity demanded is ________ the minimum quantity it takes to be at the bottom of the long-run average cost curve.