Why might monopolies find it in their long-term self-interest to not maximize their profits but to opt instead for an acceptable profit?© BrainMass Inc. brainmass.com March 4, 2021, 8:19 pm ad1c9bdddf
If a monopoly is in a sector where competition could emerge in the long-run, it might choose to reduce its profits to curtail such possible future competition. This would enable it to maintain its monopoly on the market. Excess profit inevitably attracts new firms, even to what looks like a natural ...
This solution discusses when monopolies find it in their long-term self-interest to not maximize their profits.