In perfectly competitive markets long term economic profit is zero. If so, why firms bother to...
Homework Answers
In perfect competition all firms in the long run earn only normal profit or zero economic profit. Zero economic profit means firm revenue is covering economic cost. Economic cost is the sum of implicit+explicit cost whereas implicit cost covers the opportunity cost which include the normal profit. Normal profit is the profit which can be earned by doing some other business. Thus when firms earns zero economic profit then firm earns normal profit due to which firms bother to enter.
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In
perfectly competitive markets long term economic profit is zero. If
so, why firms bother to...
In the long run, a firm in a perfectly competitive market earns zero economic profit, so...
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.
are making an economic Today, firms in a perfectly competitive market run, firms will profit. In...
are making an economic Today, firms in a perfectly competitive market run, firms will profit. In the long firns in a perfectly competitive market are making the market until all firms in the market onomic e) exit, producing at the minimum point on their long-run average cost d) a) exit; covering only their total fixed costs b) enter, making zero economic profit enter, making zero normal profit an economic profit when new firms enter 46. The firms in a perfectly...
If perfectly competitive firms are making an economic profit, then A) new firms will enter the...
If perfectly competitive firms are making an economic profit, then A) new firms will enter the market. B) the market cannot be in either a short-run or a long-run equilibrium. C) the market must be in long-run equilibrium but cannot be in a short-run equilibrium. D) the market might be in a long-run equilibrium but not a short-run equilibrium. E) some firms will exit the market.
A perfectly competitive, profit maximizing firm earns zero economic profit in the long run. The firm’s total...
A perfectly competitive, profit maximizing firm earns zero economic profit in the long run. The firm’s total cost is: TC = a + bQ2. Use only the cost curve given. Determine mathematically the level of output the firm will produce in the long run. Show mathematically if this amount differs from the amount of output the firm would produce in the short run. Explain why a perfectly competitive firm earns zero economic profit in the long run.
In which way are contestable markets different from markets that are perfectly competitive? Firms have a...
In which way are contestable markets different from markets that are perfectly competitive? Firms have a positive economic profit in the long run. There is imperfect information-some firms have access to information while others do not. Firms charge a price that does not equal marginal cost. There are a few firms in the industry. This question makes no sense because there are no differences between contestable markets and markets that are perfectly competitive.
If firms in a perfectly competitive industry are earning an economic profit and new firms enter...
If firms in a perfectly competitive industry are earning an economic profit and new firms enter the industry, then A) the new firms must incur an economic loss. B) the existing firms' economic profit decreases. C) consumer surplus decreases. D) there must be external benefits to consumption of the good. E) Both answers A and B are correct.
QUESTION 7 Monopolistic competitive firms in the long run earn: positive economic profits. zero pure economic...
QUESTION 7 Monopolistic competitive firms in the long run earn: positive economic profits. zero pure economic profits. negative economic profits. Positive, zero, or negative economic profits. QUESTION 8 Which of the following statements best describes firms under monopolistic competition? Profits will be positive in the long run. Price always equals average variable cost. In the long run, positive economic profit will be eliminated. Marginal revenue equals minimum average total cost in the short run. QUESTION 9 Which of the following...
21) If all firms in a perfectly competitive industry are experiencing economic losscs, then: 21 A...
please answer and explain
21) If all firms in a perfectly competitive industry are experiencing economic losscs, then: 21 A) sume fins will exit the industry, until sconoinic profit is positive B) soitie firms will exit the industry, uieic profit equals zero. C) some firms will exit the indusiry, until accounting prolfit equals zero. D) all existing firms will stay in the industry, hoping for better times. 23) If the market fur huiler is perfectly competit A) upward sloping. B)...
QUESTION 6 A perfectly competitive market cannot be in long term equilibrium if any of the...
QUESTION 6 A perfectly competitive market cannot be in long term equilibrium if any of the following are true EXCEPT a. Firms earn zero economic profit b. Marginal Revenue - Marginal Cost - Average Total Cost c. There is no entry and exit d. Marginal Revenue - Average Variable Cost
When a perfectly competitive market is in long-run equilibrium: O firms have an incentive to enter...
When a perfectly competitive market is in long-run equilibrium: O firms have an incentive to enter the market. O firms have an incentive to leave the market. O no firm has an incentive to enter or leave the market. When a firm operating in a perfectly competitive market is experiencing losses, it should continue operations if: O P< AVC O P=AVC O P > AVC If, in a perfectly competitive market, P= (a firm's) ATC, then the firm: earns an...
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.
are making an economic Today, firms in a perfectly competitive market run, firms will profit. In the long firns in a perfectly competitive market are making the market until all firms in the market onomic e) exit, producing at the minimum point on their long-run average cost d) a) exit; covering only their total fixed costs b) enter, making zero economic profit enter, making zero normal profit an economic profit when new firms enter 46. The firms in a perfectly...
In which way are contestable markets different from markets that are perfectly competitive? Firms have a positive economic profit in the long run. There is imperfect information-some firms have access to information while others do not. Firms charge a price that does not equal marginal cost. There are a few firms in the industry. This question makes no sense because there are no differences between contestable markets and markets that are perfectly competitive.
please answer and explain
21) If all firms in a perfectly competitive industry are experiencing economic losscs, then: 21 A) sume fins will exit the industry, until sconoinic profit is positive B) soitie firms will exit the industry, uieic profit equals zero. C) some firms will exit the indusiry, until accounting prolfit equals zero. D) all existing firms will stay in the industry, hoping for better times. 23) If the market fur huiler is perfectly competit A) upward sloping. B)...
QUESTION 6 A perfectly competitive market cannot be in long term equilibrium if any of the following are true EXCEPT a. Firms earn zero economic profit b. Marginal Revenue - Marginal Cost - Average Total Cost c. There is no entry and exit d. Marginal Revenue - Average Variable Cost
When a perfectly competitive market is in long-run equilibrium: O firms have an incentive to enter the market. O firms have an incentive to leave the market. O no firm has an incentive to enter or leave the market. When a firm operating in a perfectly competitive market is experiencing losses, it should continue operations if: O P< AVC O P=AVC O P > AVC If, in a perfectly competitive market, P= (a firm's) ATC, then the firm: earns an...
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