Question
Asked Oct 16, 2019
3 views
At zero economic profits, a competitive firm:
 
  is making a normal profit; its revenues are just sufficient to cover all costs of production, including opportunity costs.
  has an incentive to leave the industry to make higher profit elsewhere.
  is unable to pay its opportunity costs of production but will remain in business to minimize losses.
 

will benefit, in the form of higher profits, by raising its prices above average cost.

check_circle

Expert Answer

Step 1

At zero economic profit, a competitive firm is making a normal profit; its revenues are just sufficient to cover...

Want to see the full answer?

See Solution

Check out a sample Q&A here.

Want to see this answer and more?

Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour.*

See Solution
*Response times may vary by subject and question.
Tagged in

Business

Economics

Market hypothesis

Related Economics Q&A

Find answers to questions asked by student like you
Show more Q&A
add
question_answer

Q: A law school conducts a survey of graduating law students in order to study whether a tuition increa...

A: The price elasticity of demand shows the percentage change in quantity demanded due to percentage ch...

question_answer

Q: Assume all benefits (and costs) accrue to the buyers (and sellers) and the buyers and sellers intera...

A: Click to see the answer

question_answer

Q: What does it mean to graph the effects of an un anticipated increase in the price level on the AD-AS...

A: Effects of an unanticipated increase in the price level on the AD-AS can be shown as:

question_answer

Q: Discuss population growth in Colonial America.

A: Click to see the answer

question_answer

Q: The price of coffee rose sharply last month, while the quantity sold remained the same. Five people ...

A: According to Leonard’s suggestion demand increases while supply is perfectly inelastic. This suggest...

question_answer

Q: As the price of a pound of peanuts falls, would the the demand increase or decrease?

A: Answer - The  price of pound of peanuts falls then demand would decrease or increase depends on the ...

question_answer

Q: Which items count as part of this year's GDP? Group of answer choices a. final goods [ Choose ] no y...

A: Hello. Since your question has multiple sub-parts, we will solve first three sub-parts for you. If y...

question_answer

Q: How many plates of claims will Bob consume in total?

A: The consumption done by the individual provides the marginal benefit to the consumer and the expendi...

question_answer

Q: Suppose the Canadian government has decided to place an excise tax of $20 per tire on producers of a...

A: The initial equilibrium is at e where S=D and the Price= $90 and quantity= 40 units. Due to the impo...