When a firm makes profit, this sends a signal to others. More competitors would enter the business, increasing supply and driving prices O positive economic profit; up O positive economic profit; down O normal profit; down O positive accounting profit: down

When a firm makes profit, this sends a signal to others. More competitors would enter the business, increasing supply and driving prices O positive economic profit; up O positive economic profit; down O normal profit; down O positive accounting profit: down

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter14: Monopoly

Section: Chapter Questions

Problem 6PA

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Concept explainers

Profit Maximization

Economic activity is related to the use of scarce resources of the economy that are used for producing goods and services which are required to satisfy various demands of the people. In other words, it can be said that it is all about satisfying the unlimited demands of individuals with the limited resources available. The production decision is taken by the producers or the firms. In economics, the terms ‘producers’, ‘suppliers’, and ‘firms’ are interchangeable. Now the question arises, what does a firm actually mean?

Question

When a firm makes
profit, this sends a signal to others. More competitors would
enter the business, increasing supply and driving prices
O positive economic profit; up
O positive economic profit; down
O pormal profit; down
O positive accounting profit; down.

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