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Under perfect competition, a business firm can accept losses in the short term, as long as it believes that it can recover and make profits in the long run. This is because in a perfectly competitive market, firms have no control over prices and must accept the market price for their goods or services.
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What Factors determine profit and losses?
Whether the business has lots of competition, has a high sales revenue.
What are the key differences between perfect competition in the short run and long run?
In perfect competition, the key differences between the short run and long run are mainly related to the ability of firms to adjust their production levels and make profits. In the short run, firms cannot easily enter or exit the market, leading to potential economic profits or losses. In the long run, firms can enter or exit the market, driving profits to zero as competition increases. This results in a more efficient allocation of resources in the long run compared to the short run.
If several firms decide together to set the market price below their costs for the short term to drive competitors out of business what are they participating in?
If several firms collaborate to set the market price below their costs to drive competitors out of business, they are participating in predatory pricing. This anti-competitive practice aims to eliminate competition by temporarily incurring losses to gain market share. Such behavior is often subject to legal scrutiny and can violate antitrust laws, as it undermines fair competition in the marketplace.
Why is insurance a valuable aid to trade?
this is so because it protects a business from various losses that might lead to closure of the business.
A firm under a perfact competition is a price-taker not price-maker with examples?
it is a price taker because under perfect competition,price is determined by the market(through price mechanism:demand and supply) and not producer.this is because there are so many producers of the same product and all have the perfect knowledge of the market and there is only one buyer of that product,so no body can decide the price of the commodity on behalf of others.thats why a firm under perfect competition is a price taker and not a price maker. As part of the industry, the firm has to simply charge price determined by the industry. If the firm charges more price, it will lose sales and if it charges less price it will incur losses. The typical example of perfect competition is agriculture. The products are indistinguishable. There are many potential suppliers. This makes the farmer a price taker; if he or she prices the product higher than the market price, he or she will not make any sales or make fewer sales, thus incurring loss. Thus the farmer has to go with the price determined by the industry in order to survive
What Factors determine profit and losses?
Whether the business has lots of competition, has a high sales revenue.
What are the different types of risks involved in a business and how to overcome such risks?
The major risks involved in a business are : 1) Competition 2) Credit giving 3) damages and losses
Reason to merge in the business combination?
Because to get through from Perfect compitition in the market, so they merge to get monopoly of specific product in the market, to reduce the risk of uncertainities and losses of their firm....
What is the business of business?
The profit or the net margin, losses or the risk etc.
Can a business charge extra for work paid by credit card?
Technically it's unethical to charge more to customers who don't pay in cash, but it cost money for a business to accept credit cards and some small companies charge a credit card fee to compensate losses.
What are the key differences between perfect competition in the short run and long run?
In perfect competition, the key differences between the short run and long run are mainly related to the ability of firms to adjust their production levels and make profits. In the short run, firms cannot easily enter or exit the market, leading to potential economic profits or losses. In the long run, firms can enter or exit the market, driving profits to zero as competition increases. This results in a more efficient allocation of resources in the long run compared to the short run.
What nation had to accept full responsibility for starting WW 1?
Germany was forced to accept full responsibility for starting WW 1 and causing the deaths of millions and property losses.
When is it to the advantage of the business to shut down in the short run?
The advantage of shutting a business in the short run, is that it helps prevent a business from running into huge losses.
If several firms decide together to set the market price below their costs for the short term to drive competitors out of business what are they participating in?
If several firms collaborate to set the market price below their costs to drive competitors out of business, they are participating in predatory pricing. This anti-competitive practice aims to eliminate competition by temporarily incurring losses to gain market share. Such behavior is often subject to legal scrutiny and can violate antitrust laws, as it undermines fair competition in the marketplace.
Is business of business only business?
Business is a vast term and has many things in it . Its is an only business but it contain profit, growth, risk, losses or troubles etc so its is only business but contain every thing.
What has the author Robert Wemyss written?
Robert Wemyss has written: '\\' -- subject(s): Business losses, Accounting, Business enterprises
Why is insurance a valuable aid to trade?
this is so because it protects a business from various losses that might lead to closure of the business.
