Asked by David Tovar on Jun 22, 2024
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A firm operating in a perfectly competitive market may earn positive, negative, or zero economic profit in the short run.
Economic Profit
The variance between a company's overall income and its opportunity expenses, covering both direct and indirect costs.
Perfectly Competitive
A market structure where many firms offer goods or services that are similar, allowing for free entry and exit of firms.
Short Run
A period in economics during which at least one input is fixed and cannot be adjusted by a firm.
- Absorb the theories surrounding economic and accounting profits, along with their consequences for decision-making practices in firms.
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Learning Objectives
- Absorb the theories surrounding economic and accounting profits, along with their consequences for decision-making practices in firms.
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