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If competitive firm earn zero economic profit explain why anyone would invest money in them?
Ddkaola
People do not invest money in firms because of what they are earning today. They invest money because they think the firm will turn a profit in the future. Markets are anticipatory. One other reason people invest is to buy a job. Several people will get together and purchase or create a business. Then they will hire themselves to run it. The income may simply be enough to pay the help. An owner may not get his money back until he sells his share of the business and his job.
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∙ 11y ago
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if competitive firms are in zero economic profits, explain why anyone would invest money in them
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