Question

At a ski resort located over one hour from the nearest large town, there is only one grocery store and it charges prices more than 200% percent above the typical retail prices. In the long run, we would expect that: Group of answer choices demand will decrease since people will not want to pay the high prices. another store will open that will charge lower prices. another store will open that will charge equally high prices since competition is low. the store will continue to earn high profits even in the long run since the size of the market is small.

Answer 1

another store will open that will charge lower prices.

Step-by-step explanation:

The only grocery store can be classified as a monopoly.

A monopoly is when there is only one firm operating in an industry. there are usually high barriers to entry of firms. the demand curve is downward sloping. it sets the price for its goods and services.

An example of a monopoly is a utility company

In the long run, if another store opens, the industry would become a duopoly

A duopoly is when there are two firms operating in industry.

The new store would charge lower prices in order to increase its customer base