What does zero economic profits in the long-run mean to the owner of a business operating in a perfect competitive market

Q: How does a competitive firm determine the quantity that maximizes profit?

A: The markets are considered to be of utmost importance for the economies, because it assists in the…

Q: A competitive firm is maximizing its profit by selling 150 units of output. The firm’s marginal cost…

A: The objective of the question is to calculate the profit of a competitive firm that is maximizing…

Q: Why is the marginal revenue of a perfectly competitive firm equal to the market price?

A: Perfectly competitive market: - it is a market condition where there are many buyers and many…

Q: A profit-maximizing firm incurs an economic loss of $30,000 per year. Its fixed cost is $25,000 a…

A: It is given that, a profit-optimizing firm incurs an economic loss (EL) of $30,000 per year and has…

Q: Why do economists believe that economic profit is the more accurate measure of a business success?…

A: Accounting profit only considers the cost that has actually happened, but economic profit considers…

Q: If you are the manager of a perfectly competitive firm that is making a loss (TR < TC), would you…

A: Any manager worth his salt would aspire to maximize profits and minimize losses.  When the total…

Q: What is the equilibrium or profit-maximizing quantity of production for a perfectly competitive…

A: Prefect competitive market is:- 1) in perfect competitive market, there are many number of sellers…

Q: Soft drink industry has been historically profitable why? compare the economies of the concentrate…

A: Soft drink Industries are profitable because:- These industries needed lower investments. This can…

Q: f a competitive firm finds that its average variable cost is decreasing at its current profit…

A: A competitive firm is a firm that doing business in that market where the large number of buyers and…

Q: What are the characteristics of a perfectively competitive market?

A: There are different market structures with different characteristics.

Q: In the long-run, a perfectly competitive firm will earn what kind of economic profit?

A: In the long run, a perfectly competitive firm will earn normal/zero economic profit.

Q: If you are a manager in a highly competitive business such where should you put your most effort to…

A: Answer: In a highly competitive industry, all the firms sell almost homogeneous goods. The cost of…

Q: Why do a firm's profit disappear in the long run?

A: The firms operating in the long run, have to adjust and abide by the time frame which would allow…

Q: In a perfectly competitive market, how do we go from a short run equilibrium to a long run…

A: A perfect competitive market is one there many firms offer homogenous product to a large group of…

Q: Will a perfectly competitive market display allocative efficiency? Why or why not?

A: ANS Allocative Efficiency occurs when the total surplus is maximized. Where the total surplus is…

Q: Determine the output level that will maximize economic profit.

A: Economic profit is the difference between the sum of explicit and opportunity costs from the revenue…

Q: Perfectly competitive industries have free entry and exit in the long run. When will firms decide to…

A: A perfectly competitive market is a type of market structure in which there are many buyers and…

Q: Explain why economic profits in all perfectly competitive markets will tend toward zero in the long…

A: A perfectly competitive market is a market consist of large number of buyers and sellers, selling…

Q: Under what conditions would a firm decide to shut down in the short run but remain invested in the…

A: In a market, a firm faces different situations in short-run and long-run due to which it makes…

Q: If you're a manager in a highly competitive business such where should you put your most effort to…

A: As a manager ,the primary responsibility is to look in the profits of the business. Business can be…

Q: When will a business shut-down in the short-run?

A: Short-run: - it is a short time period in which some factors of production are variable and some are…

Q: What are some characteristics of perfect competition?  Is the Banana market a perfect competition?…

A: We will answer the first question since the exact one was not specified. Please submit a new…

Q: Why does perfect competitive market need to be maintained?

A: In an economy, a perfectly competitive market is the place where anyone is allowed to enter or exit…

Q: When should a firm exit the market in the long run

A: Firm entry and exit refers to the process in which new companies enter a market to sell products or…

Q: For a perfectly competitive firm to operate and produce an output level in the short-run, the firm's…

A: A perfectly competitive market is a price taker as there are many firms in the market and no firm…

Q: Why don't firms in a competitive market have excess capacity in the long run?

A: When a company produces at a lower production scale than planned, it is said to have excess…

Q: Why is the marginal revenue of a perfectly competitive firm equal the market price?

A: Answer: Marginal revenue: it refers to the additional revenue received from the sale of an…

Q: why does price equal marginal revenue for the perfectly competitive firm? what is the relationship…

A: Perfect competition refers to the type of market organization in which there are many buyers and…

Q: Farmer Smith grows wheat. The average total cost and marginal cost of growing wheat for an…

A: Perfect competition is a market form with a high number of buyers and a high number of sellers.…