Purchase Solution

Why monopolies might not maximize their profits

Not what you're looking for?

Ask Custom Question

Why might monopolies find it in their long-term self-interest to not maximize their profits but to opt instead for an acceptable profit?

Purchase this Solution

Solution Summary

This solution discusses when monopolies find it in their long-term self-interest to not maximize their profits.

Solution Preview

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 ...

Purchase this Solution


Free BrainMass Quizzes
Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.