Principles of Economics (Second Edition)
2nd Edition
ISBN: 9780393614077
Author: coppock, Lee; Mateer, Dirk
Publisher: W. W. Norton & Company
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Question
Chapter 9, Problem 7QFR
To determine
The reasons of competitive firms earning zero profit in the long run
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How is it possible for perfectly competitive firms to maximize profit in the short run versus in the long run?
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Chapter 9 Solutions
Principles of Economics (Second Edition)
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- In the long-run, a perfectly competitive firm will earn what kind of economic profit?arrow_forwardIn the long run, perfectly competitive firms make zero economic profit. If this is the case, why does the firm even bother producing? Why not exit the market completely?arrow_forwardHow does a competitive firm determine the quantity that maximizes profit?arrow_forward
- What does zero economic profits in the long-run mean to the owner of a business operating in a perfect competitive market?arrow_forwardWhy are perfectly competitive markets considered economically efficient?arrow_forwardWhy will losses for firms in a perfectly competitive industry tend to vanish in the long run?arrow_forward
- When should a firm exit the market in the long run?arrow_forwardWhat is the equilibrium or profit-maximizing quantity of production for a perfectly competitive firm?arrow_forwardA single firm in a perfectly competitive market is relatively small compared to the rest of the market. What does this mean? How “small” is “small”?arrow_forward
- How does the equilibrium of the perfectly competitive firm differ from the equilibrium of the industry?arrow_forwardIn a perfectly competitive market, how do we go from a short run equilibrium to a long run equilibrium?arrow_forwardWhy will profits for firms in a perfectly competitive industry tend to vanish in the long run?arrow_forward
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