If firms in a competitive industry incur an economic profit, what happens to supply, price, output, and economic profit in the long run? Explain

Q: Perfect competition is an extremely rare type of market in the real world. This is because the…

A: It refers to a market condition in which there are a large number of buyers and sellers that are…

Q: You read in a business magazine that farmers are reaping high profits. With the theory of perfect…

A: A perfect competition exist when there are large number of buyers and sellers in the market and the…

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: 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: 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: 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: 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: Based on the given graph: a. If this firm profit-maximizes, how much output will it produce and…

A: Given;

Q: Suppose that the tuna industry is in long-run equilibrium at a price of $5 per can of tuna and a…

A: If CEQ announces that the chemical in tuna helps to prevent from spreading, then the consumer will…

Q: When will a firm enter a competitive market?

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

Q: You read in a business magazine that farmers are reaping high profits. With the theory of perfect…

A: Note: As per the guidelines we will answer only three subparts. Please resubmit the question again…

Q: Describe the course of events in a competitive market following the adoption of a new technology.…

A: Adoption of new technology leads to increase in productivity which is shown by increase in the…

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

A: There are different market structures with different characteristics.

Q: Why do you think a firm in a perfectly competitive industry does not have market power?

A: The market is a location where the transaction of services and commodities takes place. It is…

Q: Describe how a firm in perfect competition makes profit-maximizing decisions

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

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: g. What is the firm's profit if it shuts down? h. In the long run, should this firm continue to…

A: Since you have posted a question with multiple sub-parts, we will solve first three subparts for…

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

A: Perfectly competitive markets are the one's where there are multiple buyers and sellers, products…

Q: What happens when a perfectly competitive market is in equilibrium?

A: A perfectly competitive market is a market structure in which there are many buyers and sellers. The…

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: 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: Explain how economics make profit or loss when firms are perfectly competitive.

A: In a competitive market there are large number of firms producing similar and identical products…

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: What is the relationship between marginal cost and the short-run supply curve for the purely…

A: Supply curve is the graphical representation of direct relationship between price and quantity…

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: What prevents a perfectly competitive firm from seeking higher profits by increasing the price that…

A: In a perfectly-competitive market, there are theoretically infinite number of frim. Each firm here…

Q: Why is it said that they are "price takers" and unable to influence the market price? If firms in…

A: Disclaimer: Since you have posted multiple questions, I am providing you with the answer to the…

Q: Question 17 Referring to Figure 1 in Question 14, When price is $175, will firms enter or exit the…

A: Perfect competition is a type of market structure.

Q: 08. Which of the following holds for a perfectly competitive firm that is in long-run competitive…

A: 08. Price is equal to marginal cost is long run competitive equilibrium condition of a perfectly…

Q: If a firm makes zero economic profit, it will exit the market in the long run. Do you agree?…

A: No economic profit is also referred as normal profit. Economic profit is calculated by subtracting…

Q: Briefly explain the reason for why in a competitive market we expect economic profits to be zero in…

A: A competitive market, also known as perfect competition, is a kind of market where there are a large…

Q: When is it the right time when a firm will enter a competitive market?

A: A competitive market is considered as one where firms have no opportunity to deviate from market…

Q: Explain whether a perfectly competitive market is more efficient for buyers to buy or sellers to…

A: When perfectly competitive markets combine with utility-maximizing buyers, the resulting quantity of…

Q: A perfectly competitive market arises when A) there are few buyers and many sellers. B) each of the…

A: A market is a place or a region where the buyers and sellers interact with each other to exchange…

Q: g. What is the firm's profit if it shuts down? h. In the long run, should this firm continue to…

A: A producer or seller draws out highest amount of profits when its marginal revenue , the…

Q: Suppose the book-printing industry is competitive and begins in long-run equilibrium. a. Draw a…

A: a)  Typical firm in the industry The Above figure 1  shows the curves of a typical firm in the…

Q: Can you think of a product that meets at least most of the criteria required for a perfectly…

A: Perfectly competitive market refers to the market which has been characterized by the presence of…

Q: What is the short run Supply Curve for a competitive firm?

A: In perfect competition, the short-run supply curve is the marginal cost curve (MC) at and below the…

Q: Consider the graph of a firm in a perfectly competitive market to answer the question below: MC 10…

A: Profit is maximized at a point where MR is equal to MC.

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 the short-run, competitive firms want to shut down if     P = MC     P = AVC     P > AVC…

A: A perfectly completive market is where several sellers and buyers are involved in the exchange of an…