A firm in a purely competitive industry has a typical cost structure. The normal rate of profit in the economy is 8 percent. This firm isearning $5.50 on every $50 invested by its founders.Instructions: Enter your answers as a whole number.a. What is its percentage rate of return?percentb. Is the firm earning an economic profit?|(Click to select) vIf so, how large?percentc. Will this industry see entry or exit?(Click to select) ♥d. What will be the rate of return earned by firms in this industry once the industry reaches long-run equilibrium?percent

A perfect competitive industry is characterised by freedom of entry and exit and firms can make a…

A firm in a purely competitive industry has a typical cost structure. The normal rate of profit in the economy is 8 percent. This firm earning $5.50 on every $50 invested by its founders. nstructions: Enter your answers as a whole number. 1. What is its percentage rate of return? percent o. Is the firm earning an economic profit? (Click to select) If so, how large? percent E. Will this industry see entry or exit? |(Click to select) 1. What will be the rate of return earned by firms in this industry once the industry reaches long-run equilibrium? percent

A firm in a purely competitive industry has a typical cost structure. The normal rate of profit in the economy is 8 percent. This firm earning $5.50 on every $50 invested by its founders. nstructions: Enter your answers as a whole number. 1. What is its percentage rate of return? percent o. Is the firm earning an economic profit? (Click to select) If so, how large? percent E. Will this industry see entry or exit? |(Click to select) 1. What will be the rate of return earned by firms in this industry once the industry reaches long-run equilibrium? percent

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter5: Investment Decisions: Look Ahead And Reason Back

Section: Chapter Questions

Problem 5.7IP

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