What two activities can slowly reduce economic profits to zero in a monopoly?
A monopoly is characterized by a single seller and many buyers. The seller has the discretion of exploiting the people and charging higher prices from consumers. Yet the profits can become zero due to the following two: 1. Monopolies do not last long as competitors soon take over. In such a situation the profits would become zero because the buyers would have a choice of buying the rival products and hence bring down profits of the previous producer. 2. The second would when the consumers stop buying the products altogether. If the consumers can do without the product, the profits would obviously go down. Hope this gives you a good head start. Best of luck. n.b. Both these activities usually take place in the long run.
