Asked by Jeremiah Miller on Jun 19, 2024
Verified
Firms in perfectly competitive industries that are earning short-run profits will likely break even in the long run.
Short-Run Profits
Profits earned by a firm in a period where at least one factor of production is fixed.
Perfectly Competitive
Refers to a market structure where many firms sell an identical product, and no single firm can influence the market price due to its small market share.
Break Even
The point at which total costs and total revenue are equal, resulting in no net loss or gain for a business.
- Comprehend the notion of economic gains and deficits within industries characterized by perfect competition.
- Outline the methods through which perfectly competitive markets adjust to reach long-run equilibrium when confronted with diverse cost conditions.
Verified Answer
Learning Objectives
- Comprehend the notion of economic gains and deficits within industries characterized by perfect competition.
- Outline the methods through which perfectly competitive markets adjust to reach long-run equilibrium when confronted with diverse cost conditions.
Related questions
(Figure: the Perfectly Competitive Firm)Use Figure: the Perfectly Competitive Firm ...
A Competitive Firm Is Producing 1,000 Units of Output with ...
A Competitive Market Begins in a Situation of Long-Run Equilibrium ...
In the Long Run with Free Entry and Exit and ...
A Competitive Firm Is Producing 500 Units of Output and ...