Asked by Diksha Panwar on Jun 27, 2024
Verified
In the long run,when there are economic profits,firms enter the industry,which will increase the market supply and increase the price until economic profits are zero.
Economic Profits
The excess of total revenue over total costs, including both explicit and implicit costs, in economics.
Market Supply
The total amount of a good or service that producers are willing and able to sell at varying price points, at a given time.
Long Run
An economic phase characterized by the variability of all production inputs and expenses.
- Ascertain the situational factors that indicate whether enterprises should engage in or disengage from the industry.
- Gain insights into the fluctuations of supply and demand within markets for both immediate and prolonged durations.
Verified Answer
HM
Harry McCannJun 29, 2024
Final Answer :
False
Explanation :
When firms enter the industry due to economic profits, the increased market supply will actually decrease the price until economic profits are zero, not increase it.
Learning Objectives
- Ascertain the situational factors that indicate whether enterprises should engage in or disengage from the industry.
- Gain insights into the fluctuations of supply and demand within markets for both immediate and prolonged durations.
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