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Is it possible for a competitive firm to earn supernormal profit in the long run and why?
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."
What else can I help you with?
In general monopolistically competitive frims earn profits?
The general monopolistically competitive firm does earn profit. They earn point about as much as oligopolies.
How do perfectly competitive firms earn profit in the long run?
Perfectly competitive firms earn profit in the long run by producing goods and services at the lowest possible cost and selling them at a price determined by market forces. In the long run, firms can adjust their production levels and costs to achieve equilibrium where price equals marginal cost, allowing them to earn normal profits.
Why will a perfectly competitive firm not earn an economic profit in the long run?
A perfectly competitive firm will not earn an economic profit in the long run because in a perfectly competitive market, there are many firms selling identical products, leading to price competition. This competition drives prices down to the point where firms only earn enough revenue to cover their costs, resulting in zero economic profit.
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).
How can firms ensure they are able to earn positive profit in the long run?
Firms can ensure they earn positive profit in the long run by effectively managing costs, staying competitive in the market, adapting to changing consumer needs, investing in innovation, and maintaining a strong financial position.
In general monopolistically competitive frims earn profits?
The general monopolistically competitive firm does earn profit. They earn point about as much as oligopolies.
How do perfectly competitive firms earn profit in the long run?
Perfectly competitive firms earn profit in the long run by producing goods and services at the lowest possible cost and selling them at a price determined by market forces. In the long run, firms can adjust their production levels and costs to achieve equilibrium where price equals marginal cost, allowing them to earn normal profits.
Why will a perfectly competitive firm not earn an economic profit in the long run?
A perfectly competitive firm will not earn an economic profit in the long run because in a perfectly competitive market, there are many firms selling identical products, leading to price competition. This competition drives prices down to the point where firms only earn enough revenue to cover their costs, resulting in zero economic profit.
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).
How can firms ensure they are able to earn positive profit in the long run?
Firms can ensure they earn positive profit in the long run by effectively managing costs, staying competitive in the market, adapting to changing consumer needs, investing in innovation, and maintaining a strong financial position.
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.
What is the objective of dabur?
to earn the profit
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.
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 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.
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
