EBK ECONOMICS: PRINCIPLES AND POLICY
13th Edition
ISBN: 8220100605932
Author: Blinder
Publisher: Cengage Learning US
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Question
Chapter 10, Problem 3TY
To determine
A zero economic-profit that earned by a firm.
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Students have asked these similar questions
Why would a firm that is making loss in the short-run choose to operate rather than shut down?
Many firms in the United States file for bankruptcy every year, yet they still continue operating. Why would they do this instead of completely shutting down?
Many firms in the United States file for bankruptcy every year, yet they still continue operating. Why would they do this instead of completely shutting down? Think of recent examples.
Chapter 10 Solutions
EBK ECONOMICS: PRINCIPLES AND POLICY
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Similar questions
- Many firms, especially in perfectly competitive markets, file for bankruptcy every year, yet they still continue operating. Why would they do this instead of completely shutting down?arrow_forwardDecide whether a firm making short-run losses should continue to operate or shut down its operations.arrow_forwardCan you explain to me why in the short run, firms only use variable cost to determine whether or not to shut down.arrow_forward
- In long-run equilibrium, all firms in the industry earn zero economic profit. Why is this true?arrow_forwardSmall “Mom and Pop firms,” like inner city grocery stores, sometimes exist even though they do not earn economic profits. How can you explain this?arrow_forwardWhy should a firm shut down if its average variable cost curve is above the price of their product?arrow_forward
- Discuss where does the shutdown being and why? What does the company has to do to get back to supernormal profit?arrow_forwardConsider the concepts of accounting profit and economic profit. Suppose you are a consultant and you are meeting with a business owner who is trying to decide whether to keep that business open or open a business in a different industry. Discuss the differences between accounting profit and economic profit and why it should matters in this circumstance.arrow_forwardIn the long run, should we perfectly competitive firms a positive accounting profit? Explain your reasoning.arrow_forward
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