How is it possible for perfectly competitive firms to maximize profit in the short run versus in the long run?

Q: Use a graph to demonstrate the circumstances that would prevail in a perfectly competitive market…

A: A perfectly competitive firm is price taker. The market price it faces is constant. This implies…

Q: In the long-run, any perfectly competitive firm that produces will choose a quantity such that

A: The market is a location where the transaction of services and commodities takes place. It is…

Q: What is the meaning of ‘acceptable loss’ for a perfectly competitive firm ? Draw a graph and…

A: In a perfectly competitive market, there will be a large number of sellers, which means that a…

Q: Can excess profit be earned in this industry in the long run?

A: Excess profit means an amount of profit which is higher than the total cost incurred in production.

Q: Why will losses for firms in a perfectly competitive industry tend to vanish in the long run?

A: A perfectly-competitive(PC) market is one where there are infinite number of buyers & sellers…

Q: Why will profits for firms in a perfectly competitive industry tend to vanish in the long run? Would…

A: A market will be perfectly competitive when a larger group of suppliers serve identical or…

Q: How would you describe the demand curve for the purely competitive firm? For the industry?

A: Purely competitive firms are characterised by being price takers where decisions are made…

Q: Use the following graph to answer the next question. MC ATC AVC 1.25 1.05 .90 .80 .65 .60 15 20 35…

A: Given: Market price = $1.25 Output produced at this price = 20 units  ATC corresponding to this…

Q: The number of firms in an industry is not always a good indicator of the extent to which that…

A: The number of sellers in an industry determines the market share of the firm. A large number of…

Q: If you are the manager of a perfectly competitive firm that is making a loss (TR < TC), would you…

A: Any manager worth his salt would aspire to maximize profits and minimize losses.  When the total…

Q: When might a competitive firm shutdown in the short run and exit the market in the long run?

A: When a perfectly competitive firm finds itself in shutdown, that is, its market price is equal to…

Q: What are three short-run outcomes in the perfect competition?

A: In the short-run, the perfect competitive firms, can have three outcomes.

Q: Explain why a perfectly competitive firm earns zero economic profits in the long run.

A: In an economy, different types of markets exist to make an exchange of different types of products.…

Q: What is the shape of the demand curve faced by a firm under perfect competition?

A: Perfect competition, according to economic theory, occurs when all companies sell identical items,…

Q: Why will profits for firms in a perfectly competitive industry tend to vanish in the long run?

A: Perfectly competitive markets are the one's where there are multiple buyers and sellers, products…

Q: Explain how the perfectly competitive firm decides whether to operate or shut down in the short run.

A: A perfectly competitive firm is a price taker and can sell any quantity of the commodity at the…

Q: What happens when a perfectly competitive market is in equilibrium?

A: A perfectly competitive market is a market structure in which there are many buyers and sellers. The…

Q: Explain how economics make profit or loss when firms are perfectly competitive.

A: In a competitive market there are large number of firms producing similar and identical products…

Q: What is the relationship between marginal cost and the short-run supply curve for the purely…

A: Supply curve is the graphical representation of direct relationship between price and quantity…

Q: Do you expect firms in perfectly competitive industries to have high profits in the short run? Why…

A: The perfectly competitive market is a form of market where unlimited no of buyer and seller exist,…

Q: Which of the following is true for a perfectly competitive industry?

A: option 3 is rhe correct answer The firm in industry produce standardized products  It's dentical…

Q: equilibrium

A: The equilibrium of the perfectly competitive firm from the equilibrium of the industry is different…

Q: What prevents a perfectly competitive firm from seeking higher profits by increasing the price that…

A: In a perfectly-competitive market, there are theoretically infinite number of frim. Each firm here…

Q: The vast majority of industries are probably not perfectly competitive. Why then do you suppose…

A: * ANSWER :-  * Perfect competition is the most straightforward industry structure, and it serves as…

Q: When the perfectly competitive firm and industry are in long run equilibrium, then D - MP - SAC -LAC

A: To find : In perfect competition firma and industry are in long run equilibrium then what will be…

Q: • Please explain why the long run economic profit is zero under a perfectly competitive market in…

A:

Q: you read in a business magazine that the computer firms are reaping high profits. with the theory of…

A: In a perfectly competitive market, the new firms and easily join or leave the market. Basically, the…

Q: Explain how the long run differs from the short run in pure competition.

A: Perfect competition is a form of market in which a large number of perfectly informed buyers and…

Q: Why are firms called price takers in a perfectly competitive market? Why do different firms produce…

A: A perfectly competitive firm is known as a price taker, because the pressure of competing firms…

Q: Explain whether a perfectly competitive market is more efficient for buyers to buy or sellers to…

A: When perfectly competitive markets combine with utility-maximizing buyers, the resulting quantity of…

Q: Graphically show how the profit-maximizing level of output is determined for the perfectly…

A: Perfect competitive firm is a price taker and can sell any quantity of commodity at the market…

Q: Why are abnormal profits of a firm difficult to sustain?

A: The abnormal profits under perfectly competitive market are difficult to sustain because of the free…

Q: Briefly describe what the effect of producing a greater quantity of products will be in relation to…

A: Introduction A perfectly competitive firm simply has to make one fundamental decision: how much to…

Q: What is the meaning of ''acceptable loss'' for a perfectly competitive firm? Draw a graph and…

A: Acceptable loss means the loss which has to be accepted.This happens generally in perfectly…

Q: Explain what the long run profit conditions are for a perfectly competitive market

A: Perfectly Competitive Market is the one where there are large number of buyers and sellers, selling…

Q: Predict and explain the long run equilibrium of a firm operating in a perfectly competitive market?

A: The structure of the market where there are a large number of buyers and sellers selling homogenous…

Q: Explain why in the long run perfect competitive firms can only break even.

A: Perfect competition refers to the market where homogeneous products are produced. An individual firm…

Q: A perfectly competitive firm is making a loss if

A: We have to find a perfectly competitive firm is making a loss.

Q: Explain how the perfectly competitive firm decides whether to operate or shutdown in the short run.

A: There are mainly two types of costs in the process of production.

Q: Is it even better for perfectly competitive firms to produce output even though it is losing money?…

A: In economic theory, perfect competition occurs when all companies sell the same products, market…

Q: Does a competitive firm’s price equal its marginal cost in the short run?

A: A competitive firm is one that produces and sells output in the market with many sellers who offers…

Q: What is the short run Supply Curve for a competitive firm?

A: In perfect competition, the short-run supply curve is the marginal cost curve (MC) at and below the…

Q: Consider the graph of a firm in a perfectly competitive market to answer the question below: MC 10…

A: Profit is maximized at a point where MR is equal to MC.

Q: In the long run, a perfectly competitive firm can

A: The ideal kind of market structure is known as "perfect competition," and it occurs when all…

Q: In the above figure, The cost curves of a typical perfectly competitive curve are show. What will…

A: In a competitive firm due to free entry and exit the firm earns normal profit in the long run.

Q: In long-run equilibrium, all firms in the industry earn zero economic profit. Why is this true?

A: When the firms earn economic profit in the short run, new firms will enter in the market cause…