In the long run, perfectly competitive firms cannot make an economic profit. Why?
What will be an ideal response?
An economic profit attracts entry by new firms. As new firms enter the market, the market supply increases and the market supply curve shifts rightward. The increase in supply decreases the price. And, as the price falls, the economic profit is eliminated.
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Which of the following is a consequence of free riders?
A. The government always steps in to produce the good or service. B. The good or service is produced regardless. C. The good or service is never produced because not enough people paid to use it. D. Consumers are better off by not having the good or service be produced.
La Bella Pizza is the only pizza place on Pepper Island. The figure above shows La Bella Pizza's demand curve, marginal revenue curve, and marginal cost curve. At La Bella Pizza's profit-maximizing output, its annual total revenue is
A) $168,000. B) $312,000. C) $336,000. D) $624,000.
In the 15 years ending February 2016, most active portfolio managers failed to beat the market
a. True b. False Indicate whether the statement is true or false
A competitive firm is maximizing its profit by selling 150 units of output. The firm's marginal cost is $8 and its average total cost is $6 . The firm's profit amounts to __________
Fill in the blank(s) with correct word