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Why some firms might be able to continue to make an economic profit in the long-run?...

Why some firms might be able to continue to make an economic profit in the long-run? Discuss.

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Answer #1

Answer - Yes , some firms may be able to make the economic profits in long run. This can be said as -

1 - The attainment of the economies of scale will help to reduce the production cost and thus help to increase the profits.

2 - Producing as a monopoly and having inelastic demand of the product with no substitutes will help in earning of the positive economic profits.

3- Profits in the long run can also be earned by the formation of the cartels and coordinating in the price and output decisions.

Basically if the firm is in Oligopoly or monopoly , it will be able to earn the positive economic profits in long run.

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