Does L&P earn positive economic profit if it produces the allocatively efficient quantity? Explain.

Q: If firms in a competitive industry incur an economic profit, what happens to supply, price, output,…

A: Economic profit is defined as difference between revenue that is received from the sale of a good or…

Q: in short run even if it makes negative profit. Use well labeled

A: A competitive firm may incur losses in the short run(SR) as there are some fixed cost(FC) in the…

Q: What type of economic profit can most firms expect to make in the long run? Explain your answer.

A: A market is a place where buying and selling of goods and services takes place.

Q: Question Jake is leaving Shoe Warehouse to open his own shoe boutique. Jake currently earns $40, 000…

A: Economic profits are defined as the net gains made by the company after opportunity costs and other…

Q: Can you explain to me why in the short run, firms only use variable cost to determine whether or not…

A: Shutdown point is a point of production where a firm decides not to continue production as producing…

Q: Do entry and exit occur in the short run, the long run, both, or neither?

A: In the short run, the firms have one or more fixed factors of production. The firms cannot change…

Q: What two lines determine whether a firm is making positive or negative or zero profits?

A: Introduction The perfect competitive firm only needs to decide on one thing: how much to make. To…

Q: In the long-run equilibrium, what is the price? what is the output? what is the total profit?

A: Monopolistic competition is a market structure where large number of sellers exist to produce…

Q: When would a seller possibly decide to exit the industry over the long run? What should product…

A:

Q: Why can't firms enter the market in the short-run?

A: There are various types of market structures which have different characteristics of the number of…

Q: What type of product by individual firms (none, total, some etc) are in a perfect competition and…

A: Perfect competition is a market structure in which all producers and consumers have complete and…

Q: Explain how a firm chooses a level of output to maximise profit

A: The profit maximization refers to a situation where the firm is earning the maximum possible profits…

Q: Soft drink industry has been historically profitable why? compare the economies of the concentrate…

A: Soft drink Industries are profitable because:- These industries needed lower investments. This can…

Q: When does Concave profit curves occur? Explain with an example?

A: Iso quant curve refers to the curve which shows all the combination of inputs which are capable of…

Q: Explain with the help of diagram why a perfectly firm may experience loss or positive economic…

A: Meaning of Perfect Competition: The term perfect competition refers to the market under which…

Q: In the long-run, a perfectly competitive firm will earn what kind of economic profit?

A: In the long run, a perfectly competitive firm will earn normal/zero economic profit.

Q: Why would a firm that is making loss in the short-run choose to operate rather than shut down?

A: A short run is a time period in which a firm incurs both fixed cost and variable cost. A long run is…

Q: If you are a manager in a highly competitive business such where should you put your most effort to…

A: Answer: In a highly competitive industry, all the firms sell almost homogeneous goods. The cost of…

Q: Heloise and Abelard produce letters in a perfectly competitive industry. Heloise is much better at…

A: Let's tackle each problem:a. True. In a perfectly competitive market, each firm will produce up to…

Q: g O | Output MC C b h k n a MR ATC AVC ● Use the graph and the letters in it to answer these…

A: "Every business produce in order to generate profits. While producing goods and services businesses…

Q: Explain briefly what you mean by the following terms: a. Variable cost b. Market Power

A: The objective of the question is to provide a brief explanation of two key economic terms: Variable…

Q: What does acceptable loss mean for a competitive firm? Explain and Draw a graph

A: Making business decisions and allocating resources in the face of numerous challenges is part of…

Q: Will a perfectly competitive market display allocative efficiency? Why or why not?

A: ANS Allocative Efficiency occurs when the total surplus is maximized. Where the total surplus is…

Q: MC ATC P = MR = AR

A: In a perfectly competitive market there are large number of firms producing similar and identical…

Q: WHY SOME FIRMS MIGHT BE ABLE TO CONTINUE TO MAKE AN ACONOMIC PROFIT IN THE LONG RUN?

A: A monopoly occurs when a single person or corporation serves as the exclusive supply of a certain…

Q: Use your own example to clearly differentiate between an "accounting profit" and an "economic…

A: When talking about the difference between economic and accounting profit, it can be said that…

Q: Explain how economics make profit or loss when firms are perfectly competitive.

A: In a competitive market there are large number of firms producing similar and identical products…

Q: Marginal revenue must exceed marginal cost.Explain why?

A: Total revenue is the total receipts collected from the sale of goods or services in the market. The…

Q: Why would a firm that incur choose to produce rather than to shut down?

A: When the revenue from the sale of the goods or services produced is insufficient to pay the variable…

Q: Draw a graph including AVC to illustrate a firm that is losing money, continues to operate, and…

A: The prevailing price, which is set by the relationship of supply and demand, is shown as a…

Q: How do you define 'profit

A: The main objective of the firm in whether competitive or imperfect competition market is Profit…

Q: What are the advantages of pure competition?

A: Answer: A purely competitive business is the most efficient type of operation. This is due to the…

Productive and Allocative Efficiency Analysis

Productive efficiency, also referred to as production efficiency is a term in economics describing the level at which a company is operating at its maximum capacity. Beyond this point, the entity will be unable to manufacture any additional goods without cutting down another product’s production level. This occurrence is an outcome of production happening alongside a Production Possibility Frontier (PPF).