What must an entrepreneur do to earn a profit? How do the actions of firms earning profits influence the value of resources? What happens to the value of resources when losses are present? If a firm making losses goes out of business, is this bad? Why or why not?

Q: Should the firm shut down in the short-run?  Explain in detail why or why not.

A: The decision to shut down a firm in the short run depends on the comparison between the price and…

Q: What would you expect to happen to these profit opportunities in the long-run? Hint: you are not the…

A: Purchasing Power Parity (PPP) is an economic theory and exchange rate regime that relates the…

Q: Cost LRAC 40 30 N 20 10 100 200 400 800 Output

A: The firm earns maximum profit at the point where the average costs are the minimum.  To understand…

Q: what happens to ATC and MC when companies increase the productive capabilities after they invest in…

A: Investments in productive capabilities involve spending on resources like technology, training, and…

Q: A few sentences for the response please. How does the impact of fixed costs change production…

A: Fixed costs are amount of dollars expended on fixed factors of production such as land, building,…

Q: 1. The article poses the question: "So why do farmers put up with the hassle?"  And then answers it:…

A: In the production process, the conditions and fluctuations that happen between demand and also the…

Q: What must an entrepreneur do to earn a profit? How do theactions of firms earning profits inuence…

A: Protecting one's hard work through patents and copyright acquisition is one of the most significant…

Q: If a firm closes down and produces no output, what will be its total cost ?

A: Total cost refers to the total cost incurred in process of manufacturing by a firm or company making…

Q: how does the theory of the firm differ from short term profit - maximisation? why is the former…

A: The theory of the firm and short-term profit maximization are related concepts in economics, but…

Q: Why would a firm that incurs losses choose to produce rather than shut down

A: Shut down point refers to the point where the firm stops its production process. It is the point…

Q: What happens when a company doesn't follow economic thoery and charges pries below the marginal…

A: At the point when an organization doesn't follow economic theory and charges costs below the…

Q: Why would a firm that is making loss in the short-run choose to operate rather than shut down?

A: A short run is a time period in which a firm incurs both fixed cost and variable cost. A long run is…

Q: MC ATC AVC AFC 40 70 80 90 Quantity Costs

A: Diminishing returns begin where MC curve starts rising or MP curve starts to fall. Most productive…

Q: 49. The long run is a A. O Period of three years or longer B. O Period long enough to allow firms to…

A: Long run refers to the period of time where there is no fixed cost and all the factors that are…

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: Can economic profit ever exceed accounting profit? Explain.

A: Profit is the financial gain that a business or an individual earns after deducting all expenses…

Q: WHY SOME FIRMS MIGHT BE ABLE TO CONTINUE TO MAKE AN ACONOMIC PROFIT IN THE LONG RUN?

A: A monopoly occurs when a single person or corporation serves as the exclusive supply of a certain…

Q: Distinguish between explicit and implicit costs, giving examples of each. Why does the economist…

A: Externalities: It occurs in the economy when the production of goods and services and the…

Q: Why would a firm that incurs losses choose to produce rather than shut down? Why could this choice…

A: In short run firm exhibits return to factor where only one factor is variable and another factor is…

Q: Distinguish between explicit and implicit costs, giving examples of each. What are some explicit and…

A: Implicit Cost: Implicit cost is due to the factors which are entrepreneur himself owns and employs…

Q: Explain why the firm will still operate in the market if the economic profits are equal to zero. Use…

A: The best or optimum level of output of the firm is given at the point where marginal revenue equals…

Q: Many firms, especially in perfectly competitive markets, file for bankruptcy every year, yet they…

A: Firms will shut down when their cost exceed revenue and they cannot continue to compete in the…

Q: The table represents the demand (quantity at each price) for and the total cost to produce a firms…

A: The table represents the demand (quantity at each price) for and the total cost to produce a firms…

Q: “A firm that earns only normal profit is not covering all its costs.” Do you agree or disagree?

A: Economic Cost consists of explicit cost and implicit cost. In other words it consists of sum of…

Q: What is the difference between economic profit and accounting profit? What is a normal rate of…

A: As per honor code, we’ll answer only one question at a time , we have answered the first question…

Q: A) What should a firm do if it realizes that its marginal revenue is more than its marginal cost? b)…

A: The marginal revenue refers to the additional revenue earned on selling an additional unit of…

Q: what are the inefficiencies of an imperfect competition ? what are the benefits of having a…

A: Imperfect competition is that market structure which does not include  Perfect competition. It…

Q: Explain what it means in terms of opportunity cost when Economic profits are positive?

A: When economic profits are positive, it means that a business or individual is earning more revenue…

Q: Describe the methods that can be used to to determine where profit is maximized?

A: A firm in short run and long run chooses to maximize its profits. Output levels of the firm are…

Q: What does zero economic profits in the long-run mean to the owner of a business operating in a…

A: In a perfectly competitive market, businesses operate in an environment where there are numerous…