Q: Can excess profit be earned in this industry in the long run?
A: Excess profit means an amount of profit which is higher than the total cost incurred in production.
Q: If firms in a competitive industry incur an economic profit, what happens to supply, price, output,…
A: Economic profit is defined as difference between revenue that is received from the sale of a good or…
Q: Why will losses for firms in a perfectly competitive industry tend to vanish in the long run?
A: A perfectly-competitive(PC) market is one where there are infinite number of buyers & sellers…
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: How much should the firm produce to maximize its profit? What is the firms AR? What is the firms…
A: "Since you have asked multiple parts, we will answer only first three parts for you. If you have any…
Q: In doorknob manufacturing industry, you observed that the firms are making losses. In the long run…
A: In doorknob industry, when the firms are making losses, some firms will exit the market. In the…
Q: Should Tim want to maximize his profit in the short-run, how many t-shirts will he produce?
A: Given that the market structure is monopolistic competition, the profit maximizing condition is MC=…
Q: Do entry and exit occur in the short run, the long run, both, or neither?
A: In the short run, the firms have one or more fixed factors of production. The firms cannot change…
Q: What two lines determine whether a firm is making positive or negative or zero profits?
A: Introduction The perfect competitive firm only needs to decide on one thing: how much to make. To…
Q: Explain in detail why it would be okay for you, if you were a business in a purely competitive…
A: After analyzing different types of market forms, it can be seen that the widespread form of market…
Q: Suppose the book-printing industry is competitive and begins in a long-runequilibrium.a. Draw a…
A: Meaning of Total Cost and Total Revenue: The term total cost refers to the situation under which a…
Q: The following table shows the total revenue and total cost of a firm at the various quantities of…
A: Total cost is the sum of all the costs that a firm incurs for the production of a good. The total…
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: How much should a firm sell of a particular product in order to maximize profit? What factor does it…
A: A firm should maximize profits and bring in the output level, where there would equilibrium point…
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: Evaluate the view that the main goal of firms will always be profit maximization
A: The profit is the excess revenue made by the firms after deducting the total cost of production from…
Q: What level of output should this firm produce in the short run? What price should this firm charge…
A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…
Q: The graph shows the market for Mickey's Mountain Bikes. 1. What is the profit-maximizing output per…
A: MR and AR curve is downward sloping curve which means more of good only can be sold with low price .…
Q: why do economists and policy makers use perfect competition as a benchmark to analyze market…
A: Perfectly competitive market: - it is a market condition where there are many buyers and many…
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: Family Mart like inner city grocery stores, sometimes exist even though they do not earn economic…
A: Hi Student, thanks for posting the question. As per the guideline we are providing answers for the…
Q: Only answer question 6A
A: Total variable cost is the cost of producing an output which increases with an increase in the…
Q: The following graph summarizes the demand and costs for a firm that operates in a perfectly…
A: (a) A firm can maximize its profit by producing at the level where its marginal cost become equal…
Q: Faced with rising costs , when should a firm choose to shut down , for example in (a)in the short…
A: a) In the short run, there are three possibilities. If price/average revenue > average variable…
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: economist view a perfectly competitive market structure as the ideal structure for economic…
A: According to economic theory, perfect competition exists when all businesses sell the same goods,…
Q: What does it mean to be operating a firm in the "long run?"
A: "Since you have asked multiple questions, we will only first question for you. If you have any other…
Q: As of 2019, the US department of agriculture (USDA) did not have detailed guidelines for egg farmers…
A: The fixed cost of production refers to the aggregate of costs that are incurred on the procurement…
Q: What specific data must a firm examine to decide the quantity of product it should produce to make…
A: The total cost incurred by a firm operating in a market includes fixed costs and variable costs.…
Q: Briefly explain in (2-3 sentences) why a firm may choose to stay open in the short run even if their…
A: The economic profit is the difference between accounting profit and implicit cost. It can be…
Q: Many firms in the United States file for bankruptcy every year, yet they still continue operating.…
A: Filling for bankruptcy does not mean that the firms have to shut down. In the US the bankruptcy laws…
Q: You read in a business magazine that farmers are reaping high profits. With the theory of perfect…
A: Perfect competition is many sellers dealing in commodity which is same in quality and price at which…
Q: How would you calculate the marginal cost of your firm's output? (think of a single product, not an…
A: Marginal cost can be understood as the additional cost incurred by the firm to produce an additional…
Q: What is the firms profit or loss?
A: A firm in an exceedingly competitive market wants to maximise profits similar to the other firm.…
Q: Do you think firms really try to maximize profits? Do firms (especially small ones) know what prices…
A: Economist generally assume that firms act as profit maximisers. Economists don’t think there’s…
Q: Explain why in the long run perfect competitive firms can only break even.
A: Perfect competition refers to the market where homogeneous products are produced. An individual firm…
Q: Explain why a company would shut down in the short run.
A: The shut down point is the point at which a firm decides to seize its operations in the short run…
Q: You read in a business magazine that farmers are reaping high profits. With the theory of perfect…
A: Perfect competition refers to the market structure where the number of buyers and sellers are large…
Q: Why do firms, in the long run, continue to stay in the industry if they are earning 0 profits?
A: Answer - In the long run where the every input can vary and as in the long run where firms can make…
Q: 8. Perfectly competitive firms, in the short run, should continue to operate as long as they earn…
A: In a perfectly competitive market there are large number of firms producing similar and identical…
Q: In the long run, a perfectly competitive firm can
A: The ideal kind of market structure is known as "perfect competition," and it occurs when all…
Q: In long-run equilibrium, all firms in the industry earn zero economic profit. Why is this true?
A: When the firms earn economic profit in the short run, new firms will enter in the market cause…
WHY SOME FIRMS MIGHT BE ABLE TO CONTINUE TO MAKE AN ACONOMIC PROFIT IN THE LONG RUN?
Step by step
Solved in 2 steps
