Microeconomics
13th Edition
ISBN: 9781337617406
Author: Roger A. Arnold
Publisher: Cengage Learning
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Chapter 9, 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 it is not economical for a firm to operate under increasing returns and negative returns.
What type of economic profit can most firms expect to make in the long run? Explain your answer.
Why would a firm that is making loss in the short-run choose to operate rather than shut down?
Chapter 9 Solutions
Microeconomics
Ch. 9.1 - Prob. 1STCh. 9.1 - Prob. 2STCh. 9.1 - Prob. 3STCh. 9.1 - Prob. 4STCh. 9.2 - Prob. 1STCh. 9.2 - Prob. 2STCh. 9.2 - Prob. 3STCh. 9.2 - Prob. 4STCh. 9.3 - Prob. 1STCh. 9.3 - Prob. 2ST
Ch. 9.3 - Prob. 3STCh. 9.3 - Prob. 4STCh. 9.4 - Prob. 1STCh. 9.4 - Prob. 2STCh. 9 - Prob. 1QPCh. 9 - Prob. 2QPCh. 9 - Prob. 3QPCh. 9 - Prob. 4QPCh. 9 - Prob. 5QPCh. 9 - Prob. 6QPCh. 9 - Prob. 7QPCh. 9 - Prob. 8QPCh. 9 - Prob. 9QPCh. 9 - Prob. 10QPCh. 9 - Prob. 11QPCh. 9 - Prob. 12QPCh. 9 - Prob. 13QPCh. 9 - Prob. 14QPCh. 9 - Prob. 15QPCh. 9 - Many plumbers charge the same price for coming to...Ch. 9 - Prob. 17QPCh. 9 - Prob. 18QPCh. 9 - Prob. 1WNGCh. 9 - Prob. 2WNGCh. 9 - According to the accompanying table, what quantity...Ch. 9 - Prob. 4WNGCh. 9 - Prob. 5WNGCh. 9 - Prob. 6WNGCh. 9 - Prob. 7WNGCh. 9 - Prob. 8WNGCh. 9 - Prob. 9WNGCh. 9 - Prob. 10WNG
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- Consider 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_forwardWhy do a firm's profit disappear in the long run?arrow_forward
- Small “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_forwardExplain 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_forward
- If 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_forwardCan you explain to me why in the short run, firms only use variable cost to determine whether or not to shut down.arrow_forwardMany firms, especially in perfectly competitive markets, file for bankruptcy every year, yet they still continue operating. Why would they do this instead of completely shutting down?arrow_forward
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