If the firms in a competitive industry incur an economic loss, what happens to supply, price, output, and economic profit in the long run? also please provide a scenario. thank you.

Q: In the short-run, if the marginal cost of a firm in a competitive industry is upward sloping while…

A: The short-run is the time period where at least one variable is fixed and others are variable. In…

Q: Explain how the long-run equilibrium in a perfectly competitive industry achieves 'allocative…

A: When profit-maximizing companies in perfectly competitive markets combine with utility-maximizing…

Q: If firms in a competitive industry incur an economic profit, what happens to supply, price, output,…

A: Economic profit is defined as difference between revenue that is received from the sale of a good or…

Q: The following are the cost information of a typical ice tea company in an industry with 100 firms.…

A: Answer -      Long run equilibrium - In long run all the variables are free to vary and long run…

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: What are the assumptions of perfect competition?  What are the prospects for profitability in the…

A: The perfect competition is a theoretical market structure, which follows some assumptions. In 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: Can you explain to me why in the short run, firms only use variable cost to determine whether or not…

A: Shutdown point is a point of production where a firm decides not to continue production as producing…

Q: Roots Wholefoods sells fruit and vegetables in a perfectly competitive market. Which of these…

A: Given : Roots Wholefoods sells fruits and vegetables in a perfectly competitive market.

Q: When would a seller possibly decide to exit the industry over the long run? What should product…

A:

Q: If a firm's total revenue is $100, it's total cost is $130, and its total fixed cost is $40. Should…

A: Hi Student, thanks for posting the question. As per the guideline we are providing answers for the…

Q: Why would a firm that incurs losses choose to produce rather than shut down

A: Shut down point refers to the point where the firm stops its production process. It is the point…

Q: Would independent trucking fit the characteristics of a perfectly competitive industry? and why?

A: A perfectly competitive market is where there are many numbers of buyers and sellers, with…

Q: Consider the following goods and services. Which are the most likely to be produced in a perfectly…

A: Perfectly competitive market: It has the greatest possible level of competition.

Q: Why would a firm that is making loss in the short-run choose to operate rather than shut down?

A: A short run is a time period in which a firm incurs both fixed cost and variable cost. A long run is…

Q: Assuming that the CD manufacturing business  is a perfectly competitive industry, explain why his…

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

Q: Why would a profit-maximizing, perfectly competitive form continues to operate for a period of time…

A: A perfect competitive firm who is facing losses in the market will decide to shut down if the price…

Q: Explain how a firm would maximise its profit, assuming that it faces conditions of perfect…

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

Q: Under what conditions should a competitive firm shut down in the short run?

A: In the short term, a corporation that operates at a loss (where the income is less than the overall…

Q: WHY SOME FIRMS MIGHT BE ABLE TO CONTINUE TO MAKE AN ACONOMIC PROFIT IN THE LONG RUN?

A: A monopoly occurs when a single person or corporation serves as the exclusive supply of a certain…

Q: The Emerald Company, a firm in the perfectly competitive custom jewelry industry, asks you for your…

A: First, we will find all the costs from the given information. Quantity is 550 units Total Revenue is…

Q: In the short run, if a marginal cost of a firm in a competitive industry is increasing while its…

A:

Q: Can an industry characterized by globally increasing returns to scale be perfectly competitive in…

A: 3.1Long-run equilibrium in a scenario of a perfectly competitive industry is said to have occurred…

Q: Family Mart like inner city grocery stores, sometimes exist even though they do not earn economic…

A: Hi Student, thanks for posting the question. As per the guideline we are providing answers for the…

Q: Perfect Competition:  What are the key features of a perfectly competitive market?   Many buyers and…

A: Question 1 is only answered. Post the remaining question again.

Q: If all assumptions of perfect competition hold, why would firms in such an industry have little…

A: Meaning of Perfect Competition: The term perfect competition refers to the market under which…

Q: How we can understand the Long-run Normal price in increasing cost industry, and the Long-run Normal…

A: When a business expands, its average expenses rise. This is known as an increasing-cost industry…

Q: Many firms, especially in perfectly competitive markets, file for bankruptcy every year, yet they…

A: Firms will shut down when their cost exceed revenue and they cannot continue to compete in the…

Q: Firms always lose money in a long-run industry equilibrium, true or false?

A: Firms always lose money in a long-run industry equilibrium, true or false.

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: 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: In competitive markets economic profit becomes zero in the long-run. However, it is also possible…

A: Accounting profit: Accounting profit is obtained by deducting the total explicit cost from the the…

Q: what are the inefficiencies of an imperfect competition ? what are the benefits of having a…

A: Imperfect competition is that market structure which does not include  Perfect competition. It…

Q: The equilibrium of a competitive industry is:   A neither efficient nor equitable   B equitable…

A: A competitive industry is one with many sellers and many buyers. In this market, a large group of…

Q: Many firms in the United States file for bankruptcy every year, yet they still continue operating.…

A: Filling for bankruptcy does not mean that the firms have to shut down. In the US the bankruptcy laws…

Q: Suppose all firms in a perfectly competitive market structure are in long-run equilibrium. Then…

A: Tax refers to the compulsory charges levied by the government on its citizen and the citizen. The…

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: How do the entry and exit of firms in a purely competitive industry affect resource flows and…

A: Answer - Need to find - How do the entry and exit of firms in a purely competitive industry affect…

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: Assume the firms in a perfectly competitive market are initially incurring economic losses. An…

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

Q: What is the formula for profit maximization by firm ? Why does this result in the marginal cost…

A: The profit for a firm can be calculated by subtracting the total cost (TC) from the total revenue…

Accounting and Economic Profit analysis

One comes across the concept of Profits in the context of business and in analyzing the results of business activity. Profits of a business can be accounting profits, and they can also be economic profits. So how does one understand the concept of accounting versus economic profits?