Explain why the following statement is false: Competitive firms always earn zero profits in a long...

Explain why the following statement is false: Competitive firms always earn zero profits in a long run equilibrium because their marginal cost is equal to their marginal revenue at the optimal level of production.

Expert Solution

Rahul Sunny answered 9 months ago

Explain why this statement is false: Competitive firms always earn zero profits in a long run...

Explain why this statement is false: Competitive firms always earn zero profits in a long run equilibrium because their marginal cost is equal to their marginal revenue at the optimal level of production.

Explain why the firms in a perfectly competitive industry will earn zero economic profits in the...

Explain why the firms in a perfectly competitive industry will earn zero economic profits in the long run. I need the answer in 1 hour, please?

why do competitive firms earn zero economic profit in the long run

Using the definition and characteristics of perfectly competitive industries, explain why—in the long run—firms earn zero...

Using the definition and characteristics of perfectly competitive industries, explain why—in the long run—firms earn zero economic profits. Does this mean that competitive firms earn zero accounting profits? Your response should be at least 75–150 words (1–2 paragraphs) in length.

1. In the short run, monopolistically competitive firms: a) will earn zero economic profits by acting...

1. In the short run, monopolistically competitive firms: a) will earn zero economic profits by acting like a monopolist. b) can earn positive economic profits by acting like a monopolist. c) will earn zero economic profits by acting like a perfectly competitive firm. d) can earn positive economic profits by acting like a perfectly competitive firm. 2. Product differentiation refers to: a) the process of informing the public of differences in products as a result of error. b) firms who...

5. A profit-maximizing firm in a competitive market will earn zero accounting profits in the long...

5. A profit-maximizing firm in a competitive market will earn zero accounting profits in the long run. a. True b. False 6.In the long run, when price is greater than average total cost, some firms in a competitive market will choose to enter the market. a. True b. False 7. In making a short-run profit-maximizing production decision, the firm must consider both fixed and variable cost. a. True b. False 8. A firm operating in a perfectly competitive market may...

In the long-run equilibrium, all firms in a perfectly competitive market earn zero economic profit. Explain...

In the long-run equilibrium, all firms in a perfectly competitive market earn zero economic profit. Explain why this is true using intuition and graphs.

true/false explain. Since the firms in a monopolistically competitive industry make zero profit in the long...

true/false explain. Since the firms in a monopolistically competitive industry make zero profit in the long run (same long-run profit outcome as the perfectly competitive market), monopolistically competitive markets are as efficient as perfectly competitive markets.

Suppose that a perfectly competitive market is in long-run equilibrium such that all firms earn zero...

Suppose that a perfectly competitive market is in long-run equilibrium such that all firms earn zero economic profits. Suppose also that each individual firm reports a yearly profit of $100,000 to the government and its shareholders. Is this situation possible or impossible? Explain your answer in your own words. Hint: Consider total opportunity costs (b) Consider a perfectly competitive market. As the level of output increases, is the supply curve in the long run in a perfectly competitive market upward-sloping,...

Why will profits for firms in a perfectly competitive industry tend to vanish in the long...

Why will profits for firms in a perfectly competitive industry tend to vanish in the long run? Would this be true of losses also? Why or why not?

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