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Is it possible for a competitive firm to earn supernormal profit in the long run and why?
Wiki User
∙ 12y ago
No.
There are two basic reasons.
The first is market correction: if Alpha Bolt Company is making 30 percent profit and Bravo Bolt, Charlie Bolt and Delta Bolt are all making 20 percent because all their prices are lower than Alpha's, people will start to buy fewer Alpha Bolts, which will lead to Alpha's profits falling in line with the rest of the industry.
The other is, if Alpha Bolt is making 30 percent profit at the same price point as its competitors, and they got there through increased efficiency, at some point this 30 percent profit margin will be the "new normal."
Wiki User
∙ 12y ago
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In general monopolistically competitive frims earn profits?
The general monopolistically competitive firm does earn profit. They earn point about as much as oligopolies.
Can a monopolistic competitive firm earn long run profit?
In the long run, if a firm is making a profit more firms will enter. This will cause profit to drop. Firms will eventually drop out because of this and economic profit will makes it way to zero(a result of the invisible hand).
Is it possible for a firm to become too big to be competitive and earn a profit?
the entire motto for a company or a firm is earning profits and nothing else. And i dont find any valid reason to increase your overheads, ultimately the principal amount of investment will increase and if u are not experienced, u will fail definitely in expansion.
If there are no profits in competitive equilibrium why do firms produce how can they stay in business?
why do firm stay in business if profit is=0In 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
A monopolist will not always produce on the inelastic portion of its demand curve?
(inelastic portion is when MR = negative figure) Yes , because the optimum point is when MR equals to MC and there is no hell a way when MC is negative. Other than this, when the price is at the upper proportion of monopoly demand curve, the price is always higher and the monopoly firm will earn supernormal profit. Any answer which is reasonable will be accept.
In general monopolistically competitive frims earn profits?
The general monopolistically competitive firm does earn profit. They earn point about as much as oligopolies.
Can a monopolistic competitive firm earn long run profit?
In the long run, if a firm is making a profit more firms will enter. This will cause profit to drop. Firms will eventually drop out because of this and economic profit will makes it way to zero(a result of the invisible hand).
Can I earn a profit by having a wedding consultant business?
With the right buisnesses model it is very possible to start a wedding consultant business and earn a normal salary.
Is it possible for a firm to become to big to be competitive and earn profit?
the entire motto for a company or a firm is earning profits and nothing else. And i dont find any valid reason to increase your overheads, ultimately the principal amount of investment will increase and if u are not experienced, u will fail definitely in expansion.
Is it possible for a firm to become too big to be competitive and earn a profit?
the entire motto for a company or a firm is earning profits and nothing else. And i dont find any valid reason to increase your overheads, ultimately the principal amount of investment will increase and if u are not experienced, u will fail definitely in expansion.
Is it possible for firm to become too big to be competitive and earn a profit?
the entire motto for a company or a firm is earning profits and nothing else. And i dont find any valid reason to increase your overheads, ultimately the principal amount of investment will increase and if u are not experienced, u will fail definitely in expansion.
Is it possible for a firm to become too big to be competitive and earn profit?
the entire motto for a company or a firm is earning profits and nothing else. And i dont find any valid reason to increase your overheads, ultimately the principal amount of investment will increase and if u are not experienced, u will fail definitely in expansion.
What is the objective of dabur?
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What is the activity or entity that aims to earn a profit by providing goods and services that meet the needs of others?
any activity which seeks to earn a profit by providing a good or service is known as
What profit margins do florists earn?
46%
An activity which seeks to earn a profit by providing a good or service is known as?
any activity which seeks to earn a profit by providing a good or service is known as
If there are no profits in competitive equilibrium why do firms produce how can they stay in business?
why do firm stay in business if profit is=0In 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
