Buying a monopoly from the existing owner does NOT ensure an economic profit because
A) the market for monopolies is a monopoly.
B) competition among buyers drives up the cost of buying the firm.
C) profits equal zero in the long run anyway.
D) of the deadweight loss triangle.

Question

Quizplus · Accepted Answer

Competition among buyers can drive up the purchase price of the monopoly to a level where the new owner may not earn an economic profit, as the cost of acquisition may offset potential profits.

Buying a Monopoly from the Existing Owner Does NOT Ensure