Take a look at the below graph. This graph uses the data from the below table which indicates that the 5area of the blue rectangle displaying hourly economic profits of $5 per period. What prevents this firm from continuing to produce the same number of units per hour but raising the price that it charges for each unit in order to enlarge the area of the profit rectangle? Concept Introduction: In perfect competition , there is freedom of entry and exit. If there is a higher demand for a particular commodity, new firms will enter into the industry. These will result in an increased production of that good and thereby leads to a fall in the market price of the particular commodity. In the long run, firms may leave the market. Firms will leave the market when they get a negative economic profit. Economic profit: The economic profit of a firm is calculated by deducting total revenue from total cost. The total costs consists of both implicit and explicit costs. Explicit cost is the ordinary costs of the firm like rent, salaries to the employees etc. Implicit cost is also known as imputed cost which describes as the opportunity cost of anything.

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Chapter 23, Problem 15P

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Take a look at the below graph. This graph uses the data from the below table which indicates that the 5area of the blue rectangle displaying hourly economic profits of $5 per period. What prevents this firm from continuing to produce the same number of units per hour but raising the price that it charges for each unit in order to enlarge the area of the profit rectangle?

Concept Introduction:

In perfect competition, there is freedom of entry and exit. If there is a higher demand for a particular commodity, new firms will enter into the industry. These will result in an increased production of that good and thereby leads to a fall in the market price of the particular commodity. In the long run, firms may leave the market. Firms will leave the market when they get a negative economic profit.

Economic profit: The economic profit of a firm is calculated by deducting total revenue from total cost. The total costs consists of both implicit and explicit costs. Explicit cost is the ordinary costs of the firm like rent, salaries to the employees etc. Implicit cost is also known as imputed cost which describes as the opportunity cost of anything.

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Consider the following statements: a. Fewer people are employed in Freedonia now than at any time in the past 75 years. b. The unemployment rate in Freedonia is lower now than it has been in 75 years.Can both of these statements be true at the same time? A. Yes, these statements can be correct if more people are classified as "discouraged workers."B. No, these statements cannot be true since unemployment must increase as employment decreases.C. Yes, if the number of unemployed decreases more than the number of employed.D. Yes, both of these statements can be correct if labor productivity increases.

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