which markets enjoy economic profits in the long run
Homework Answers
Answer
Monopoly and oligopoly
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The markets with a barrier to entry earn an economic profit in the long run.
As the monopoly is one firm in the market facing the demand of the market where entry is restricted.
also, oligopoly has few firms in the market and can earn an economic profit in the long run as new firms can not enter the market.
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Perfect competition and monopolistic competition market earn zero economic profit in the long run as the entry in the market is easy and free.
23. Economic profits are NOT possible in the long run in which of the following markets?...
23. Economic profits are NOT possible in the long run in which of the following markets? a Monopoly Oligopoly Monopolistic Competition d Duopoly Figure 1 26. Refer to Figure 1: Suppose the firm whose costs and demand are represented in the figure is a monopolist. What is the profit of this firm? a) (P4-P2)*Q1 b) (P3-P1)*Q1 c) (P6-P4)*Q1 d) (P3-P2)*Q2 27. Refer to Figure 1: Suppose the firm whose costs and demand are represented in the figure is a perfectly...
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QUESTION 7 Monopolistic competitive firms in the long run earn: positive economic profits. zero pure economic...
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In the long run, a firm in a perfectly competitive market earns zero economic profit, so...
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If firms are making positive economic profits in the short run, then in the long run:...
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Your textbook states that, in the long run, representative firms in monopolistically competitive markets will just break even --- that is, earn zero economic profits. Yet some firms in highly competitive markets manage to continue to earn economic profits indefinitely. For example, perfumes, cosmetics, and hair care firm L’Oreal, in business since 1907, remains highly profitable today, despite competing in fiercely competitive product categories. How has L’Oreal managed to stay profitable for so long (clue: they have a research and...
23. Economic profits are NOT possible in the long run in which of the following markets? a Monopoly Oligopoly Monopolistic Competition d Duopoly Figure 1 26. Refer to Figure 1: Suppose the firm whose costs and demand are represented in the figure is a monopolist. What is the profit of this firm? a) (P4-P2)*Q1 b) (P3-P1)*Q1 c) (P6-P4)*Q1 d) (P3-P2)*Q2 27. Refer to Figure 1: Suppose the firm whose costs and demand are represented in the figure is a perfectly...
In the long run, a firm in a perfectly competitive market earns zero economic profit, so the opportunity in the short run to enjoy positive economic profits will cause existing firms to increase output and new firms to enter the market.
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