Explain why it is not sensible to close a business firm if it earns zero economic profits.

Question:

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Economics Principles and Policy

ISBN: 978-0538453653

12th edition

Authors: William J. Baumol, Alan S. Blinder

See More Books

Question Posted: Apr 12, 2016 07:14 AM

See More Questions

Explain why it is not enough to simply clone the benchmarking partner's process.
Explain why it is not necessary to include product cost (price or price times quantity) in the EOQ model, but the quantity discount model requires this information.
Explain why it is common for auditors to send confirmation requests to vendors with zero balances on the clients accounts payable listing but uncommon to follow the same approach in verifying...
John Black is considering to purchasing a land from Real Estate Ltd for $1,000,000. The terms of the agreement are, 10% down payment, and the balance is to be repaid at 20% interest for duration of...
DS Unlimited has the following transactions during August. August 6 Purchases 70 handheld game devices on account from GameGirl, Inc., for $200 each, terms 1/10, n/60. August 7 Pays $400 to Sure...
Garrett Industries turns over its inventory six times each year; it has an average collection period of 45 days and an average payment period of 30 days. The firms annual sales are $3 million....
Why are proof test plans needed?
A quant jock from your firm used a linear demand specification to estimate the demand for its product and sent you a hard copy of the results. Unfortunately, some entries are missing because the...
herokee Incorporated is a merchandiser that provided the following information: Number of units sold Selling price per unit Variable selling expense per unit Variable administrative expense per unit...
Lars Linken opened Lars Cleaners on March 1, 2022. During March, the following transactions were completed. Mar. 1 Issued 10,000 shares of common stock for $15,000 cash. 1 Borrowed $6,000 cash by...
Explain why P = MC in the short-run equilibrium of the perfectly competitive firm, whereas in long-run equilibrium P = MC = AC.
If the firm's lowest average cost is $52 and the corresponding average variable cost is $26, what does it pay a perfectly competitive firm to do if a. The market price is $51? b. The price is $36? c....
Describe the difference between general language and specific language.
An electricity company pays today a dividend $ 1 . 6 4 per share and the share price is $ 2 7 . If the sustainable growth rate is 5 % and the profit distribution ratio is 6 0 % what will be the...
An electricity company pays today a dividend $ 1 . 6 4 per share and the share price is $ 2 7 . If the expected yield is 1 0 % what will be the dividend growth rate?
02. Which box has/have 3rd lowest number? -s: A. Box - 1 only B. Box - 7 C.Box- 1 and Box - 8 D. Box - 3
In the beginning of January 2 0 2 3 you want to estimate the value of a stock. On December 3 1 2 0 2 2 the price of the stock was $ 6 3 . 5 and you believe that the annual dividend growth rate and...
If equity is $ 2 9 8 , 0 0 0 and liabilites are $ 1 9 1 , 0 0 0 , then assets equal:
On January 2, 2024, Hadley Inc., which reports under IFRS, purchased shares of Letourneau Corp. for $10 a share. Hadley intends to hold these shares as a long-term investment. During 2024, Letourneau...
The unadjusted trial balance of Secretarial Services is as follows: SECRETARIAL SERVICES Unadjusted Trial Balance as at 31 December 2017 Account Debit Credit Cash at bank Office supplies Prepaid...
We learned in this chapter that successful speculators buy a currency when demand is weak and sell it when demand is strong. Use supply and demand diagrams for two different periods (one with weak...
For years, the U.S. government has been trying to get Japan and the European Union to expand their economies faster. Explain how more rapid growth in Japan would affect the U.S. economy.
If inflation is lower in Germany than in Spain (as it is), and the exchange rate between the two countries is fixed (as it is, because of the monetary union), what is likely to happen to the balance...
Excerpts from Andre Company's December 31, 2024 and 2023, financial statements are presented below: Accounts receivable Inventory Net sales Cost of goods sold Total assets Net income Total...
The York City Hospital has just acquired new equipment. The equipment cost $ 4 , 2 5 0 , 0 0 0 , and the organization spent $ 1 3 5 , 0 0 0 on upgrading the physical plant to the new equipment will...
Carmen Camry operates a consulting firm called Help Today, which began operations on December 1. On December 31, the company's records show the following selected accounts and amounts for the month...

Explain why it is not sensible to close a business firm if it earns zero economic profits.

Question:

Step by Step Answer:

If a firm is earning zero economic profit the owners in...View the full answer

Economics Principles and Policy

Students also viewed these Economics questions