A firm in a perfectly competitive industry has a typical cost structure. The normal rate of profit in the economy is 6 percent. This firm is earning $15 on every $150 invested by its founders. Instructions: Enter your answers as whole numbers. a. What is its percentage rate of return? O percent. b. Is the firm earning an economic profit? (Click to select) If so, how large? O percent. c. Will this industry see entry or exit? (Click to select)
A firm in a perfectly competitive industry has a typical cost structure. The normal rate of profit in the economy is 6 percent. This firm is earning $15 on every $150 invested by its founders. Instructions: Enter your answers as whole numbers. a. What is its percentage rate of return? O percent. b. Is the firm earning an economic profit? (Click to select) If so, how large? O percent. c. Will this industry see entry or exit? (Click to select)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![A firm in a perfectly competitive industry has a typical cost structure. The normal rate of profit
in the economy is 6 percent. This firm is earning $15 on every $150 invested by its founders.
Instructions: Enter your answers as whole numbers.
a. What is its percentage rate of return?
percent.
b. Is the firm earning an economic profit? (Cick to select)
If so, how large? O percent.
c. Will this industry see entry or exit? (Click to select)
d. What will be the rate of return earned by firms in this industry once the industry reaches
long-run equilibrium? O percent.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F827e21a8-0e94-4930-aeb6-da4558636740%2Fac149c9d-7f5c-4bf6-b353-8ad300355fe2%2Fuoak18i_processed.jpeg&w=3840&q=75)
Transcribed Image Text:A firm in a perfectly competitive industry has a typical cost structure. The normal rate of profit
in the economy is 6 percent. This firm is earning $15 on every $150 invested by its founders.
Instructions: Enter your answers as whole numbers.
a. What is its percentage rate of return?
percent.
b. Is the firm earning an economic profit? (Cick to select)
If so, how large? O percent.
c. Will this industry see entry or exit? (Click to select)
d. What will be the rate of return earned by firms in this industry once the industry reaches
long-run equilibrium? O percent.
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