With regard to its economic profits and economic losses, how is the short run different from the long run for a perfectly competitive firm?
What will be an ideal response?
The firm can make an economic profit, incur an economic loss in the short run, or make zero economic profit in the short run. In the long run, however, the only possible outcome is zero economic profit. An economic profit attracts entry by new firms and economic losses lead to exit by some firms. Thus, after entry or exit is complete in the long run, the remaining firms will make zero economic profit.
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The rightward shift of the RS curve will lead to a ________ in the U.S. exchange rate, ________ in real GDP, and a ________ in the price level
A) rise; a decrease; fall B) rise; an increase; rise C) fall; an increase; rise D) rise; an increase; fall E) fall; an increase; fall The figure above shows the market for loanable funds. The supply of loanable funds curve shifts rightward.
The fallacy of composition is the fallacious view that
a. economic activity will benefit everyone. b. what is true for the individual will also be true for the group. c. it is possible for the whole to be greater than the sum of the individual parts. d. association does not necessarily indicate causation.