Why do firms, in the long run, continue to stay in the industry if they are earning 0 profits?

Q: economic profit serves as a beacon to entrepreneurs.  This means

A: Q1 it is true, economic profits serves as beacon to entrepreneur  If there is positive profit then…

Q: Explain how short-run economic profits become long-run economic costs. When profits fall to zero,…

A: A stopwatch or a calendar cannot correctly identify the boundary between the short and long runs. It…

Q: Do firms really equate their marginal cost with marginal revenue?

A: Answer

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: Why do economists believe that economic profit is the more accurate measure of a business success?…

A: Accounting profit only considers the cost that has actually happened, but economic profit considers…

Q: If you are the manager of a perfectly competitive firm that is making a loss (TR < TC), would you…

A: Any manager worth his salt would aspire to maximize profits and minimize losses.  When the total…

Q: Can you explain to me why in the short run, firms only use variable cost to determine whether or not…

A: Shutdown point is a point of production where a firm decides not to continue production as producing…

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: Soft drink industry has been historically profitable why? compare the economies of the concentrate…

A: Soft drink Industries are profitable because:- These industries needed lower investments. This can…

Q: MC АТС 20 -MR 16 30 40 Firm What is the amount of profit for the firm in the graph?

A: A Firm will be in equilibrium when its profit is maximized or loss is minimized. For this following…

Q: What happens when a company doesn't follow economic thoery and charges pries below the marginal…

A: At the point when an organization doesn't follow economic theory and charges costs below the…

Q: What is the difference between Economic Profit and Accounting profit?

A: Explicit Cost is the cost paid to factors of production that are hired from outsiders. Implicit Cost…

Q: what tools and techniques are available to improve a firm's profits?

A: There are many tools and techniques available which is used by the firm to improve profit.Following…

Q: MC ATC P = MR = AR

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

Q: e. What will be the rate of return earned by most firms in the industry in long-run equilibrium?…

A: % rate of return = (Profit/Investment)*100

Q: Under what conditions will a firm shut down temporarily? Explain.

A: One of the classifications of a firm’s costs is fixed cost (FC) and variable cost(VC). Fixed costs…

Q: what are the maximum profits this firm can earn?

A: A competitive market is a typical market that answers the demands for goods and services. A…

Q: If you're a manager in a highly competitive business such where should you put your most effort to…

A: As a manager ,the primary responsibility is to look in the profits of the business. Business can be…

Q: What is meant by normal profit?

A: The total revenue earned by a firm operating in a market is the sum of payments received from the…

Q: When will a business shut-down in the short-run?

A: Short-run: - it is a short time period in which some factors of production are variable and some are…

Q: Whe  Should a firm close or shut down in a perfect competitive market or firm?

A: In a perfect competition, a firm thinks to shut down when it faces losses. That is, when Revenues…

Q: Why economic profit is negat

A: Profit: It refers to the revenue earned by the companies. With more profit earned by the companies,…

Q: A cashew (a type of nut) farmer, named Ted, generated a large economic profit this year from a great…

A: Economic Profit is calculated by deducting total cost from total revenue.  Firms usually earn…

Q: If the firms are earning abnormal profit how will the number of firms in industry change?

A: According to the given question In Simple words we can say that the abnormal profits are the profits…

Q: Using the figure above, what is profit/loss for the firm?

A: In the case of a profit-maximizing firm, the optimal point of production is where the price is equal…

Q: What is the firms profit or loss?

A: Since the marginal revenue of the firm is above the average total cost and the marginal cost the…

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: Should a company produce more goods when marginal revenue is greater than marginal costs? Explain.

A: Marginal Cost is the additional cost incurred in the production of additional unit of output.…

Q: What is the difference between economic profit and accounting profit?

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

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: To compute Economic Profits, which costs are used? Illustrate

A: The term ‘Economic Profit’ of a firm or an organization refers to the difference between the revenue…

Q: Instructions: In part a, enter your answer as a whole number. In part b, round your answer to 2…

A: Answer: (b). From part (a) it is known that the profit-maximizing quantity of corn is 16 dozen ears…

Q: Explain the difference between a firm's revenue and its profit. Which do firms maximize?

A: Revenue is the total amount received by selling the required units of goods or services.  Profit is…

Q: Explain profit ?

A: The average sales price multiplied by the number of units sold equals revenue. Net income is…

Q: A firms total profit equals?

A: The amount of money a company makes by selling its goods or services at a specific price is revenue.…

Q: What is the shutdown decision of the firm? How should a firm decide whether to continue business or…

A: For a perfectly competitive company, where the total revenue of the company, i.e. the product of its…

Q: c) What quantity on the graph represents long run equilibrium if the firm were perfectly…

A: Multiple vendors in the market offering homogeneous goods at the same price is referred to as…

Q: Suppose the price of eggs plummeted to $1.25 a dozen? What would Farmer Johnson's profit (or loss)…

A: We have to calculate at price p = $1.25,  what is the loss or profit of the farmer.

Q: d. How much output does each firm produce in the short run? How much profit does each firm make? f.…

A: Introduction We have given demand and cost function of a competitive market. d) Cost function: Short…