Market structure refers to the characteristics of an industry that define the likely behaviour and performance of its firms. One of market structure is pure competition. According to the basic model of pure competition, in the long run all firms in a purely competitive industry will earn normal profits. If all firms earn only a normal profit in the long run, critically evaluate why any firms would bother to develop new products or lower-cost production methods

Market structure refers to the characteristics of an industry that define the likely behaviour and performance of its firms. One of market structure is pure competition. According to the basic model of pure competition, in the long run all firms in a purely competitive industry will earn normal profits. If all firms earn only a normal profit in the long run, critically evaluate why any firms would bother to develop new products or lower-cost production methods

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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