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

Q: Do firms really equate their marginal cost with marginal revenue?

A: Answer

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: In doorknob manufacturing industry, you observed that the firms are making losses. In the long run…

A: In doorknob industry, when the firms are making losses, some firms will exit the market. In the…

Q: Should Tim want to maximize his profit in the short-run, how many t-shirts will he produce?

A: Given that the market structure is monopolistic competition, the profit maximizing condition is  MC=…

Q: Why do economists believe that economic profit is the more accurate measure of a business success?…

A: Accounting profit only considers the cost that has actually happened, but economic profit considers…

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: Many firms in the United States file for bankruptcy every year, yet they still continue operating.…

A: The costs of production include both the fixed costs as well as the variable costs. The fixed costs…

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: 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: Why do a firm's profit disappear in the long run?

A: The firms operating in the long run, have to adjust and abide by the time frame which would allow…

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: Small “Mom and Pop firms,” like inner city grocery stores, sometimes exist even though they do not…

A: “Mom and Pop firms” is a small independent business entity where the ownership and operations are…

Q: Many firms, especially in perfectly competitive markets, file for bankruptcy every year, yet they…

A: Firms will shut down when their cost exceed revenue and they cannot continue to compete in the…

Q: Why economic profit is negat

A: Profit: It refers to the revenue earned by the companies. With more profit earned by the companies,…

Q: When should a firm exit the market in the long run

A: Firm entry and exit refers to the process in which new companies enter a market to sell products or…

Q: The graph shows the relevant curves for a profit maximizing monopolist. Assume that it is possible…

A:

Q: Why don't firms in a competitive market have excess capacity in the long run?

A: When a company produces at a lower production scale than planned, it is said to have excess…

Q: Why are abnormal profits of a firm difficult to sustain?

A: The abnormal profits under perfectly competitive market are difficult to sustain because of the free…

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

A: Allocative efficient quantity is where the firm produces at a point P = MC  P is the price  MC is…

Q: Why do firms, in the long run, continue to stay in the industry if they are earning 0 profits?

A: Answer - In the long run where the every input can vary and as in the long run where firms can make…

Q: What are the advantages of scale in capitalist competition

A: GIVEN   the advantages of scale in capitalist competition   Defination of scale: means cost benefits…

Q: Are there fixed costs in the long-run? Explain briefly.

A: Cost is the total expenditure incurred on the production of goods and services. Cost is divided into…

Q: What will be the firms total profit?

A: In Perfect competition, the firm is in equilbrium where the MC curve cuts MR curve below. Here, MR…

Q: YCON101 FEX 2021 2Male Sppese the market price increased to $6. What is the firm's economic profit…

A: The following problem has been solved as follows:

Q: Why is it reasonable to think of normal profit as a type of cost to the firm?

A: In the short run, firms usually try to temporarily shut down their operations when the prices are…