A firm earning a zero economic profit in the long run has earned a competitive return or normal rate of return on their investment. What do they mean by "competitive" or "normal rate" of return in this context? A. The firm is making more than the rate of return of a comparable firm in the industry. B. The firm's return is at least as larger as the returns earned by other firms. C. The firm's return is at least as large as could be earned in another investment. D. The firm's return is negative, which initiates stronger competition among firms in the market. E. The firm's return could only be earned under perfect competition and would be smaller under imperfect competition.

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
icon
Related questions
Question

Need typed solution

A firm earning a zero economic profit in the
long run has earned a competitive return or
normal rate of return on their investment.
What do they mean by "competitive" or
"normal rate" of return in this context?
A. The firm is making more than the rate of
return of a comparable firm in the industry.
B. The firm's return is at least as larger as the
returns earned by other firms.
C. The firm's return is at least as large as could
be earned in another investment.
D. The firm's return is negative, which initiates
stronger competition among firms in the
market.
E. The firm's return could only be earned
under perfect competition and would be
smaller under imperfect competition.
Transcribed Image Text:A firm earning a zero economic profit in the long run has earned a competitive return or normal rate of return on their investment. What do they mean by "competitive" or "normal rate" of return in this context? A. The firm is making more than the rate of return of a comparable firm in the industry. B. The firm's return is at least as larger as the returns earned by other firms. C. The firm's return is at least as large as could be earned in another investment. D. The firm's return is negative, which initiates stronger competition among firms in the market. E. The firm's return could only be earned under perfect competition and would be smaller under imperfect competition.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Learner's Curve
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Recommended textbooks for you
ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:
9780190931919
Author:
NEWNAN
Publisher:
Oxford University Press
Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education