You observed that in the long run, a profit-maximizing firm chose to exit a market. What can you infer about the profits of this firm?

Q: Use a graph to demonstrate the circumstances that would prevail in a perfectly competitive market…

A: A perfectly competitive firm is price taker. The market price it faces is constant. This implies…

Q: A firm was producing at profit maximizing output and decided to shut down. Which of the following is…

A: The profit of the profit maximizing firm is maximized at a point where marginal revenue is equal to…

Q: The, competitive firm maximizes its profit by operating where:

A: Under perfect competition, individual firms have no control over price. Therefore, the firm’s…

Q: Why are perfectly competitive markets considered economically efficient?

A: There are several forms of the market that exists in the real world out of which perfect competition…

Q: Choose the one alternative that best completes the statement or answers the question. i) Perfect…

A: Option D ie considerable advertising by individual firm In case of Perfect Competition, there are…

Q: When would a seller possibly decide to exit the industry over the long run? What should product…

A:

Q: Why would a profitable for-profit organization choose to exit a line of business

A: A for-profit firm or organization is described as an entity that mainly generates profit more than…

Q: . According to Joseph Schumpeter, profit is the reward for

A: "Capitalism, Socialism, and Democracy" is the most famous book by Schumpeter. He also introduced the…

Q: Under what conditions will a firm exit a market? Explain theoretically and graphically.

A: Short‐run supply curve- The short‐run supply curve of the firm is the portion of its marginal cost…

Q: Analyze why perfectly competitive firms are not able to raise prices

A: Answer - Perfectly competitive Firm - Perfectly competitive firm are the firms who are price taker…

Q: Why would a firm that incurs losses choose to produce rather than shut down

A: Shut down point refers to the point where the firm stops its production process. It is the point…

Q: A large city has nearly 500 restaurants, with new ones entering regularly as the population grows.…

A: A perfectly competitive market alludes to a market structure in which there are countless firms and…

Q: Why are sellers in perfect competition unable to increase prices?

A: Perfect competition is a market structure characterized by large number of firms selling homogenous…

Q: In the long run, perfectly competitive firms make zero economic profit. If this is the case, why…

A: When a company's economic profit is zero, it is in a state of normal profit, which is why normal…

Q: When will a firm neither enter or exit a competitive market?

A: In competitive market firms are free to enter and exit.

Q: Why would a firm that incur choose to produce rather than to shut down?

A: When the revenue from the sale of the goods or services produced is insufficient to pay the variable…

Q: Is it true that a firm in a perfectly competitive market will never be able to earn positive…

A: There are different types of market which are broadly grouped as: Perfect competition and Imperfect…

Q: What are the advantages of pure competition?

A: Answer: A purely competitive business is the most efficient type of operation. This is due to the…

Q: Using an appropriate diagram, explain how a perfectly competition firm achieves profit- maximising…

A: The structure of the market where there exist many firms who sell homogenous goods to many buyers…

Q: The market equilibrium in a perfect competition market is determined by millions of sellers and…

A: Perfect competition can be defined as the form of market where the large number of sellers sell the…

Q: A firm under perfect competition is

A: To find : What is firm under perfect competition.

Q: Under what conditions would a firm decide to shut down in the short run but remain invested in the…

A: In a market, a firm faces different situations in short-run and long-run due to which it makes…

Q: Why does perfect competitive market need to be maintained?

A: In an economy, a perfectly competitive market is the place where anyone is allowed to enter or exit…

Q: Firms always lose money in a long-run industry equilibrium, true or false?

A: Firms always lose money in a long-run industry equilibrium, true or false.

Q: Explain why a profit-maximizing competitive firm would produce up to the point where price equals…

A: The marginal cost of creation is the adjustment of absolute creation cost that comes from making or…

Q: How equilibrium price is determined under perfect competition?

A: Under perfect competition, both producers and consumers are price takers.

Q: The equilibrium of a competitive industry is:   A neither efficient nor equitable   B equitable…

A: A competitive industry is one with many sellers and many buyers. In this market, a large group of…

Q: The decision to continue competing in a market depends upon the answers to the following questions…

A: To sustain in the market ones have to bear the fixed cost in the short run as we know.  Compete with…

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: What are the requirements for a perfect competition market?

A: Competitive market: - it is a market condition where there are many buyers and many sellers in the…

Q: Why a competitive firm is price taker? Explain graphically why perfect competition is preferable to…

A: When the following conditions exist, firms are said to be in perfect competition: (1) many firms…

Q: When price is less than marginal cost, a profit-maximizing producer in perfect competition will:

A: In the case of perfect competition, each firm takes the market price as given and hence produces an…

Q: In the long run, any firm will eventually leave the industry if

A: In the long run, any firm will eventually leave the industry if price :

Q: What are the main characteristics of a competitivemarket?

A: A perfectly competitive market is the one, where there are a large number of firms selling…

Q: Many economists would argue that there is no such thing as perfect competition in the real world.…

A: The perfectly competitive market is the one with completed information and complete freedom to make…

Q: Q2. In Pakistan, there are several farmers in various situations, selling identical products to the…

A: Perfect competition refers to a market structure in which there are a large number of buyers and…

Q: In a perfectly competitive market, firms:

A: When there are large number of buyers and sellers in the market striving  for a product then there…

Q: Describe a firm’s decision to shut down and when to exit the market,and explain the difference…

A: Perfect competition is a market structure that has a large number of buyers and sellers who have…

Q: Assuming that the market for cigarettes is in perfect competition, what do allocative and productive…

A: In a perfectly competitive market, when both the profit-maximizing firms and the utility-maximizing…