Answered: Explain how economics make profit or…

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Economics

Explain how economics make profit or loss when firms are perfectly competitive.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Explain how economics make profit or loss when firms are perfectly competitive.

Definition Definition Amount earned or lost on the sale of one or more items is referred to as the profit or loss on that item

Expert Solution

Step 1

In a competitive market there are large number of firms producing similar and identical products thus have no market power and will act as a price maker.

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