Microeconomics Plus Myeconlab With Pearson Etext (1-Semester Access)
6th Edition
ISBN: 9780134435053
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
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Question
Chapter 12, Problem 12.5.2RQ
To determine
Whether a firm earning zero economic profit will continue to produce in the long run.
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Students have asked these similar questions
Briefly explain the reason for why in a competitive market we expect economic profits to be zero inthe long run. Why do firms operate even though they face 0 economic profit?
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Will this company produce or shut down in the short run? Why?
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Q3
Chapter 12 Solutions
Microeconomics Plus Myeconlab With Pearson Etext (1-Semester Access)
Ch. 12 - Prob. 12.1.1RQCh. 12 - Prob. 12.1.2RQCh. 12 - Prob. 12.1.3RQCh. 12 - Prob. 12.1.4PACh. 12 - Prob. 12.1.5PACh. 12 - Prob. 12.1.6PACh. 12 - Prob. 12.1.7PACh. 12 - Prob. 12.1.8PACh. 12 - Prob. 12.2.1RQCh. 12 - Prob. 12.2.2RQ
Ch. 12 - Prob. 12.2.3RQCh. 12 - Prob. 12.2.4PACh. 12 - Prob. 12.2.5PACh. 12 - Prob. 12.2.6PACh. 12 - Prob. 12.2.7PACh. 12 - Prob. 12.2.8PACh. 12 - Prob. 12.3.1RQCh. 12 - Prob. 12.3.2RQCh. 12 - Prob. 12.3.3PACh. 12 - Prob. 12.3.4PACh. 12 - Prob. 12.3.5PACh. 12 - Prob. 12.3.6PACh. 12 - Prob. 12.3.7PACh. 12 - Prob. 12.3.8PACh. 12 - Prob. 12.4.1RQCh. 12 - Prob. 12.4.2RQCh. 12 - Prob. 12.4.3RQCh. 12 - Prob. 12.4.4PACh. 12 - Prob. 12.4.5PACh. 12 - Prob. 12.4.6PACh. 12 - Prob. 12.4.7PACh. 12 - Prob. 12.4.8PACh. 12 - Prob. 12.4.9PACh. 12 - Prob. 12.4.10PACh. 12 - Prob. 12.5.1RQCh. 12 - Prob. 12.5.2RQCh. 12 - Prob. 12.5.3RQCh. 12 - Prob. 12.5.4PACh. 12 - Prob. 12.5.5PACh. 12 - Prob. 12.5.6PACh. 12 - Prob. 12.5.7PACh. 12 - Prob. 12.5.8PACh. 12 - Prob. 12.5.9PACh. 12 - Prob. 12.5.10PACh. 12 - Prob. 12.5.11PACh. 12 - Prob. 12.5.12PACh. 12 - Prob. 12.5.13PACh. 12 - Prob. 12.5.14PACh. 12 - Prob. 12.6.1RQCh. 12 - Prob. 12.6.2RQCh. 12 - Prob. 12.6.3RQCh. 12 - Prob. 12.6.4PACh. 12 - Prob. 12.6.5PACh. 12 - Prob. 12.6.6PACh. 12 - Prob. 12.6.7PACh. 12 - Prob. 12.6.8PACh. 12 - Prob. 12.6.9PACh. 12 - Prob. 12.6.10PA
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Similar questions
- According to the accompanying table, what quantity of output should the firm produce? Explain your answer.arrow_forward"In the short run, even when output is zero, the firm still has some variable costs it must pay." Is the statement correct or incorrect? Briefly explain your answer.arrow_forwardDraw a graph including AVC to illustrate a firm that is losing money, continues to operate, and minimizing its loss. Explain a situation in which a firm would want to produce at a loss, rather than not produce at all.arrow_forward
- If firms in a competitive industry incur an economic profit, what happens to supply, price, output, and economic profit in the long run? Explainarrow_forwardNotes for graph: MC is marginal cost, MR is marginal revenue, ATC is average total cost, AVC is average variable cost and D is the demand curve. To maximize the profit, how many units should the firm produce? At what price? Based on your answer, what is the total revenue? Total costs? Total profit? Total fixed cost? Will you operate this firm in the short run? Long run? Briefly explain.arrow_forwardGraphically depict a purely competitive firm in the short-run. You can have the firm making a profit or loss in the short-run. Brief explanation and graphs required.arrow_forward
- How is it possible for perfectly competitive firms to maximize profit in the short run versus in the long run?arrow_forwardCould you explain what is the long run and short run of a firm in a marketarrow_forwardExplain how economics make profit or loss when firms are perfectly competitive.arrow_forward
- Consider the perfectly competitive market for steak (a normal good). Starting from long-run equilibrium, show graphically what happens in the short and long run to q. Q. P, and r in the market for steak (in comparison to the starting point) if income increases. Briefly explain.arrow_forwardA perfectly competitive firm is currently maximizing profits. The market for its product is in a long-run equilibrium. Market demand for the product decreases. Briefly explain what happens in the market by describing what will happen to this firm’s production (and most importantly why) as a result of that change. Describe what will happen and why to the firm’s costs and profits as the firm makes its choices. Emphasize why each type of individual cost does or does not change as the firm changes its level of production.arrow_forwardSuppose Sophia sells flowers in a perfectly competitive market and always maximizes profit. (a) Given the current market price is $5, Sophia sells 2000 flowers every week and makes zero profit. What are the amounts of marginal revenue, marginal cost and average total cost at this level of output? Briefly explain. (b) Continued from (a), if the market demand decreases, what will be the short-run impact on Sophia’s profit? Explain in detail with diagrams.arrow_forward
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