If the firms in a competitive industry incur an economic loss, what happens to supply, price, output, and economic profit in the long run? also please provide a scenario. thank you.

Q: In the long run, when there are economic losses, firms leave the industry, which will decrease the…

A: In competitive markets, firms operate with the objective of maximizing their profits. However, it is…

Q: What would you expect to happen to these profit opportunities in the long-run? Hint: you are not the…

A: Purchasing Power Parity (PPP) is an economic theory and exchange rate regime that relates the…

Q: Will a Perfectly competitive market display productive efficiently? Why or why not?

A: A perfectly competitive market is the one where there are a large number of buyers (consumers) or…

Q: A capitalist interested in the California plum market has asked you for an analysis.  The capitalist…

A: Perfect competition is a type of market structure in which there are large number of buyers and…

Q: Why will profits for firms in a perfectly competitive industry tend to vanish in the long run? Would…

A: A market will be perfectly competitive when a larger group of suppliers serve identical or…

Q: If TC=288-11Q + 2Q2 in perfect competition how much will each individual firm produce in the…

A: Perfect Competition is a market situation where there are large number of buyers and sellers selling…

Q: if TC = 144 - 11Q+Q² in perfect competition how much will each individual firm produce in the…

A: A Perfectly Competitive firm maximizes profit by producing output at a firm where Price is equal to…

Q: A perfectly competitive firm does not increase its quantity of output without limit, even though it…

A: Answer: Introduction: A perfectly competitive firm is a price taker. In perfect competition, firms…

Q: In the short-run, if the marginal cost of a firm in a competitive industry is increasing while its…

A: Introduction In the case of a competitive firm, the average total cost will be downward sloping as…

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

A:

Q: D) What will happen to the industry in the (new) long run? Please Illustrate your answer and explain…

A: No perfectly competitive firm acting alone can influence the market cost. Notwithstanding, the blend…

Q: Why would a firm that incurs losses choose to produce rather than shut down

A: Shut down point refers to the point where the firm stops its production process. It is the point…

Q: c) A certain brand of vacuum cleaners can be purchased from several local stores as well as from…

A: Economic profit is the gap between the total revenue of the firm and its total economic costs that…

Q: Would independent trucking fit the characteristics of a perfectly competitive industry? and why?

A: A perfectly competitive market is where there are many numbers of buyers and sellers, with…

Q: Identify a real world industry that may show either many firms entering or exiting the competitive…

A: In economics, a competitive marketplace refers to a market structure characterized by a large number…

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 profit-maximizing, perfectly competitive form continues to operate for a period of time…

A: A perfect competitive firm who is facing losses in the market will decide to shut down if the price…

Q: What are the characteristics of a perfectly competitive industry?

A: Perfectly competitive market refers to market where large number of buyers and sellers participate…

Q: Assume that the plum market has lots of different farms.  They are producing pretty much the same…

A: A perfect competition is called as the ideal market structure because; in this structure of market…

Q: Consider wheat farmers in a developing country. Farmers/farms are identical (i.e. they have the same…

A: A perfectly competitive industry is a theoretical market structure characterized by a large number…

Q: Why would a firm that incurs losses choose to produce rather than shut down? Why could this choice…

A: In short run firm exhibits return to factor where only one factor is variable and another factor is…

Q: Perfect Competition:  What are the key features of a perfectly competitive market?   Many buyers and…

A: Question 1 is only answered. Post the remaining question again.

Q: How do perfectly competitive firms make output decisions. Discuss in detail.

A: In a perfectly competitive market structure there exists a large number of buyers and sellers of the…

Q: Assume that the plum market has lots of different farms.  They are producing pretty much the same…

A: A theoretical market structure is referred to as a perfect competition model. There are no…

Q: Do you expect firms in perfectly competitive industries to have high profits in the short run? Why…

A: The perfectly competitive market is a form of market where unlimited no of buyer and seller exist,…

Q: Looking around your city, what businesses do you think come closest to the model of a perfectly…

A: Looking around, we see that there are very very few businesses that fit into the description of a…

Accounting and Economic Profit analysis

One comes across the concept of Profits in the context of business and in analyzing the results of business activity. Profits of a business can be accounting profits, and they can also be economic profits. So how does one understand the concept of accounting versus economic profits?