PRIN OF MICROECONOMICS
2nd Edition
ISBN: 9780393914085
Author: coppock
Publisher: Norton, W. W. & Company, Inc.
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Question
Chapter 9, Problem 7QR
To determine
Explain the reason for why do competitive firms earn zero economic profit in the long run.
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How is it possible for perfectly competitive firms to maximize profit in the short run versus in the long run?
Why don't firms in a competitive market have excess capacity in the long run?
In the long-run, a perfectly competitive firm will earn what kind of economic profit?
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- If firms in a competitive industry incur an economic profit, what happens to supply, price, output, and economic profit in the long run? Explainarrow_forwardIn the long run, perfectly competitive firms make zero economic profit. If this is the case, why does the firm even bother producing? Why not exit the market completely?arrow_forwardHow does a competitive firm determine the quantity that maximizes profit?arrow_forward
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