Economics (MindTap Course List)
13th Edition
ISBN: 9781337617383
Author: Roger A. Arnold
Publisher: Cengage Learning
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Question
Chapter 22, Problem 5QP
To determine
Explain why the statement “one firm earning higher profits than another” is not possible in reality.
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Explain why there is no profit-maximizing level of output for a firm with increasing returns to scale. What does this imply in reality?
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What type of economic profit can most firms expect to make in the long run? Explain your answer.
Chapter 22 Solutions
Economics (MindTap Course List)
Ch. 22.1 - Prob. 1STCh. 22.1 - Prob. 2STCh. 22.1 - Prob. 3STCh. 22.1 - Prob. 4STCh. 22.2 - Prob. 1STCh. 22.2 - Prob. 2STCh. 22.2 - Prob. 3STCh. 22.2 - Prob. 4STCh. 22.3 - Prob. 1STCh. 22.3 - Prob. 2ST
Ch. 22.3 - Prob. 3STCh. 22.3 - Prob. 4STCh. 22.4 - Prob. 1STCh. 22.4 - Prob. 2STCh. 22 - Prob. 1QPCh. 22 - Prob. 2QPCh. 22 - Prob. 3QPCh. 22 - Prob. 4QPCh. 22 - Prob. 5QPCh. 22 - Prob. 6QPCh. 22 - Prob. 7QPCh. 22 - Prob. 8QPCh. 22 - Prob. 9QPCh. 22 - Prob. 10QPCh. 22 - Prob. 11QPCh. 22 - Prob. 12QPCh. 22 - Prob. 13QPCh. 22 - Prob. 14QPCh. 22 - Prob. 15QPCh. 22 - Many plumbers charge the same price for coming to...Ch. 22 - Prob. 17QPCh. 22 - Prob. 18QPCh. 22 - Prob. 1WNGCh. 22 - Prob. 2WNGCh. 22 - According to the accompanying table, what quantity...Ch. 22 - Prob. 4WNGCh. 22 - Prob. 5WNGCh. 22 - Prob. 6WNGCh. 22 - Prob. 7WNGCh. 22 - Prob. 8WNGCh. 22 - Prob. 9WNGCh. 22 - Prob. 10WNG
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- List the conditions that must exist for a firm to make economic profits over the long runarrow_forwardConsider the following information about a business Rodriguez opened last year: price = $5; quantity sold = 15,233; implicit cost = $18,000; explicit cost = $33,000. What was Rodriguez's accounting profit and economic profit?arrow_forwardUnder what conditions would a firm decide to shut down in the short run but remain invested in the market in the long run? Explain your reasoning.arrow_forward
- Why do a firm's profit disappear in the long run?arrow_forwardExplain why the firm will still operate in the market if the economic profits are equal to zero. Use the graph to support your answer.arrow_forwardSmall “Mom and Pop firms,” like inner city grocery stores, sometimes exist even though they do not earn economic profits. How can you explain this?arrow_forward
- Explain how economies of scale keep new firms from entering an industry in which firms are earning economic profits.arrow_forwardYou've been hired by Goldilocks Bakeshop to calculate measures of costs and revenue. Given the data they have provided you with (see table), you are asked to compute the following: a. Total Revenue (TR) at each Quantity (Q) level b. Marginal Revenue (MR) c. Marginal Cost (MC) d. Profit at every quantity level Quantity Price Total cost Total Marginal Marginal cost Profit revenue revenue 10 5 12 3 15 5 19 5 24 30 7 45 5. 5) 5)arrow_forwardIf all assumptions of perfect competition hold, why would firms in such an industry have little incentive to carry out technological change or much research and development?arrow_forward
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