Profits of a monopoly are driven to zero
A)In the long-run as all assets are mobile in the long-run
B)Immediately in the short-run as assets move from low-valued uses to high-valued uses instantly
C)In the long run because the demand curve becomes more inelastic
D)In the short run because the demand curve becomes more elastic

Question

Quizplus · Accepted Answer

In the long run, new firms can enter the market if there are no barriers, driving profits to zero as competition increases. However, in a true monopoly, barriers to entry prevent this, so profits may not be driven to zero.

Profits of a Monopoly Are Driven to Zero