When should a firm exit the market in the long run

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: Can a perfectly competitive firm set its own market price?

A: Perfect or pure competition is a form of market in which a large number of perfectly informed buyers…

Q: Why will profits for firms in a perfectly competitive industry tend to vanish in the long run? Would…

A: A market will be perfectly competitive when a larger group of suppliers serve identical or…

Q: Which are the most likely to be produced in a perfectly competitive industry?

A: A completely competitive market is one in which all businesses sell the same product and where…

Q: normal profit

A: There are different market structures like: ‘Perfect Competition’, ‘Monopoly’, ‘Monopolistic…

Q: What type of economic profit can most firms expect to make in the long run? Explain your answer.

A: A market is a place where buying and selling of goods and services takes place.

Q: must each perfectly competitive firm be in equilibrium if the industry is in the long-run…

A: Perfect competition refers to the situation where there are large number of prouder and consumers…

Q: Can you explain to me why in the short run, firms only use variable cost to determine whether or not…

A: Shutdown point is a point of production where a firm decides not to continue production as producing…

Q: When would a seller possibly decide to exit the industry over the long run? What should product…

A:

Q: Why can't firms enter the market in the short-run?

A: There are various types of market structures which have different characteristics of the number of…

Q: What type of product by individual firms (none, total, some etc) are in a perfect competition and…

A: Perfect competition is a market structure in which all producers and consumers have complete and…

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

A: Perfect or pure competition is a form of market in which a large number of perfectly informed buyers…

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: 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: 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: What are the options available to a firm when the market demand exceeds capacity?

A: Here's a set of features that assist companies in proactively addressing excess demand and…

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: What are the characteristics of a perfectly competitive industry?

A: Perfectly competitive market refers to market where large number of buyers and sellers participate…

Q: How a firm respond to economy profits and economy losses in perfectly competitive market?

A: In the economic theory, perfect competition happens when all organizations sell indistinguishable…

Q: How does a perfectly competitive firm decide what price to charge?

A: Firms in a perfectly competitive market cannot influence the price as there are large numbers of…

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: A market in perfect competition is in long-run equilibrium. What happens to the market if labor…

A: A perfect competition(PC) market is the market with many producers and consumers producing…

Q: Do you expect firms in perfectly competitive industries to have high profits in the short run? Why…

A: The perfectly competitive market is a form of market where unlimited no of buyer and seller exist,…

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: an excess profit be earned in perfectly competitive markets in the long run. Explain.

A: Perfect competition refers to the market where there is large number of buyers and sellers who deal…

Q: At what point would a competitive firm shut down in the short run

A: A competitive firm is a price taker, which means the firm takes the price determined by the market…

Q: equilibrium

A: The equilibrium of the perfectly competitive firm from the equilibrium of the industry is different…

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: Under what conditions will a firm shut down temporarily? Explain. Under what conditions will a firm…

A: In situations where it cannot pay its variable costs, a company may decide to temporarily close.…

Q: In the short run, the firm should

A: A firm should produce in short run if the market price is greater than average variable cost.  And a…

Q: If the firms are earning abnormal profit how will the number of firms in industry change?

A: According to the given question In Simple words we can say that the abnormal profits are the profits…