Which theory of profit holds that a firm's profits can differ from zero only in the short run?
A) Risk-bearing theory
B) Frictional theory
C) Monopoly theory
D) Managerial efficiency theory

Question

Quizplus · Accepted Answer

The frictional theory of profit suggests that profits arise due to imperfections in the market, such as information asymmetry or delays in adjustments within the market. These conditions are typically short-lived as markets adjust, making profits tend to zero in the long run as equilibrium is reached.

Which Theory of Profit Holds That a Firm's Profits Can