Asked by Brandon Ramdeholl on May 05, 2024
Verified
In the long run, if we observe firms in a competitive market earning economic profits, we know that this market is in long-run equilibrium.
Economic Profits
Profits calculated by subtracting both explicit and implicit costs from total revenue, showing the total return exceeding all opportunity costs.
Long-run Equilibrium
A state in which all factors of production and outputs are optimized, resulting in a stable economic environment without tendencies for change.
Competitive Market
A market structure characterized by a large number of buyers and sellers, free entry and exit, and products that are similar across sellers, leading to price competition and efficiency.
- Identify the factors that result in economic gains or losses for enterprises in competitive environments over an extended period.
Verified Answer
Learning Objectives
- Identify the factors that result in economic gains or losses for enterprises in competitive environments over an extended period.
Related questions
In Competitive Markets Where Firms Are Observed to Be Exiting ...
Assume a Purely Competitive Increasing-Cost Industry Is in Long-Run Equilibrium ...
In the Short Run,a Purely Competitive Firm Will Earn a ...
If a Firm Observes That the Price of Its Product ...
Assume for a Competitive Firm That MC = AVC at ...