Monopoly with High Barriers Ensures Sustained Profits

Steps:

• Identify market structures: A is perfect competition; B is oligopoly-like; C is unstable monopoly; D is pure monopoly.
• Recall short-run profits: Any structure allows temporary large profits from innovation or demand shifts.
• Assess long-run profits: Entry barriers determine if profits persist; low barriers erode profits via new entrants.
• Select structure: Only high barriers prevent entry, sustaining one firm's dominance and profits.

Why D is correct:

• In monopoly (one firm) with high barriers, no entrants erode profits, allowing large economic profits indefinitely per economic theory.

Why the others are wrong:

• A: Low barriers lead to zero long-run profits in perfect competition.
• B: Many firms with high barriers face competition, limiting long-run profits.
• C: Low barriers attract entrants, ending the one-firm structure and profits in the long run.

Final answer: D