explain fully why perfectly competitive and monopolistically compwtitive firms must earn only normal profita in long-run...

explain fully why perfectly competitive and monopolistically compwtitive firms must earn only normal profita in long-run equilibrium but monoploiws can earn either normal profita or economic profits in long-run equilibrium. (one page)

Expert Solution

Rahul Sunny answered 1 year ago

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.

Monopolistically competitive firms do not earn profit in the long-run but still they are considered inefficient....

Monopolistically competitive firms do not earn profit in the long-run but still they are considered inefficient. Explain briefly.

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.

Why is there no economic profit for perfectly competitive firms in the long run? Why is...

Why is there no economic profit for perfectly competitive firms in the long run? Why is there no economic loss? Answer this question by using an example of a market or industry where perfectly competitive or close to perfectly competitive firms operate (or run their businesses) in close to 'no economic profit or no economic loss' situation.

In the long run in a perfectly competitive industry, price equals marginal cost and firms earn...

In the long run in a perfectly competitive industry, price equals marginal cost and firms earn no economic profits. The following two equations describe this long-run situation for prices and costs, where the numbers indicate the amounts of each input (labor and land) needed to produce a unit of each product (wheat and cloth): P wheat = 60w + 40r P cloth = 75w + 25r If the price of wheat is initially 100 and the price of cloth is...

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,...

Compare  the short run and long run for perfectly competitive firms. How do perfectly competitive firms...

Compare  the short run and long run for perfectly competitive firms. How do perfectly competitive firms adapt to market changes in the short run? What can perfectly competitive firms expect in the long run in terms of profits?

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 using properly labelled diagrams, why a perfectly competitive firm will earn only normal profit in...

Explain using properly labelled diagrams, why a perfectly competitive firm will earn only normal profit in the long-run. (16)

Explain why monopolistically competitive firms are considered to be less efficient than the perfectly competitive ones...

Explain why monopolistically competitive firms are considered to be less efficient than the perfectly competitive ones in the long run despite the fact that both are operating at the break-even points.

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