0
If there are no profits in competitive equilibrium why do firms produce how can they stay in business?
Wiki User
∙ 12y ago
- In economic profit is revenue minus all costs,including implicit costs,like the opportunity cost of the owner's time and money.
- In the zero profit equilibrium,firms earn enough revenue to cover these costs.
- by Abdul hanan tareen
Wiki User
∙ 12y ago
Add your answer:
Earn +20 pts
What of the forces of the business environment involves the rivalry among businesses for customers and profits?
The competitive dimension
Why must profits be zero in long-run competitive equilibrium?
The short answer: entry of new firms and exit of old ones. If profits are positive, new firms will enter the industry, piling in until they compete away all these profits. If long-term profits are negative, firms will exit until the price rises enough so that the firms who stay in the market can break even.
Perfectly competitive firm in long run equilibrium?
what about them? profits are 0 price=marginal cost all costs are variable optimal allocation of inputs is where marginal rate of technical substitution is equal to the price ratio of the inputs.
Profits encourage entry into purely competitive industries and losses encourage exit from purely competitive industries because?
When profits are zero, the firm is earning sufficient revenue to cover the opportunity cost.
Which statements is true about profits in a monopolistically competitive market?
many firms will earn profits in the short term, but they must constantly innovate and compete to earn profits in the long term
What of the forces of the business environment involves the rivalry among businesses for customers and profits?
The competitive dimension
How can the finance function of an international business improve the firm’s competitive position in the global marketplace?
Earning profits
Why must profits be zero in long-run competitive equilibrium?
The short answer: entry of new firms and exit of old ones. If profits are positive, new firms will enter the industry, piling in until they compete away all these profits. If long-term profits are negative, firms will exit until the price rises enough so that the firms who stay in the market can break even.
Perfectly competitive firm in long run equilibrium?
what about them? profits are 0 price=marginal cost all costs are variable optimal allocation of inputs is where marginal rate of technical substitution is equal to the price ratio of the inputs.
What does competitive advantage mean and what is one means of identifying?
A competitive advantage is something that allows one company to outperform competitors. One way to identify a competitive advantage is comparing profits. If one competitor has higher average profits, then it has some kind of competitive advantage.
How can profit make a company more effective and competitive?
Profit can make a company more effective and competitive in the market in various ways. The company will have more resources which it can pump into the business and do better promotions and adverts which will translate to even more profits.
Profits encourage entry into purely competitive industries and losses encourage exit from purely competitive industries because?
When profits are zero, the firm is earning sufficient revenue to cover the opportunity cost.
Which statements is true about profits in a monopolistically competitive market?
many firms will earn profits in the short term, but they must constantly innovate and compete to earn profits in the long term
In general monopolistically competitive frims earn profits?
The general monopolistically competitive firm does earn profit. They earn point about as much as oligopolies.
How does a business function?
by gaining profits
Explain why a monopolist must lower its quantity relative to a competitive market to maximize its profits?
A monopolist must lower its quantity relative to a competitive market to maximize its profits because the monopolist already controls and owns the largest share of the market.
What is the importance of profits?
Profits - Expense = Savings and Investment Profits keep a business going as long is it is more than expense.
