Question: a. Why would a company keep producing if it's making zero profit in equilibrium? (10 points) b. Name a productive (to the economy) way a

a. Why would a company keep producing if it's making zero profit in equilibrium? (10 points)

b. Name a productive (to the economy) way a company can escape zero-profit equilibrium, and explain why it creates value. (15 pts)

c. Name an unproductive (to the economy) way a company can escape zero-profit equilibrium, and explain why it doesn't create value. (15 pts)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!

Q:

Your friend Joe wants to become a taxi driver. You agree to lend him your car. If Joe agrees to pay you $20 for every hour he uses your car, what kind of income is that for you, and why? (12 points)...

Q:

assay of what you may think is important and what can be interesting from this reading. Does technology make your life easier? 1.1 Introduction: the "Easier-life Thesis" It is commonly repeated that...

Q:

THE LONE-RUN INDUSTWV SUPPLVCLIHVE 247 that Mensa has some especially productive input that Densa does not have. For example. suppose that Mensa and Densa both purchase ofce space to begin their...

Q:

*- 'nll-' uni-I'v- 'p---uI--'II Reread pp. 247253 in the Browning and Zupan reading on long run supply and m Consider a highly competitive market where the firms all face the same costs. They start...

Q:

Question 5 (1 point) At the farmer's market in Irvine, California, the price of avocados is set at $3 each. At that price, 120 avocados are supplied but only 100 are purchased. Represent this on a...

Q:

I have attached the discussion board 6 questions,scenario. and lectures for yourreview and response. I will submit a students questions for a response when I receive one. Thank You MKT500 Discussion...

Q:

For this assignment, you will write a case analysis. You have a choice of using Case 27 in your textbook, 3M - The First 110 Years, or choosing a case from the list below. Then, write a comprehensive...

Q:

Prepare the financial analysis to support your decision between bankruptcy,voluntary reorganization,and Chapter11reorganization.It must be complete and prepared in a professional level,with the...

Q:

Roberge, M. (2015). The right way to use compensation. Harvard Business Review, 93, 70-75. Zehnder, E. (2001). A simpler way to pay. Harvard Business Review, 79, 53-61. 1. Explain how EZI compensates...

Q:

Roberge, M. (2015). The right way to use compensation. Harvard Business Review, 93, 70-75. Zehnder, E. (2001). A simpler way to pay. Harvard Business Review, 79, 53-61. 1. Explain how EZI compensates...

Q:

An investor has two bonds in his portfolio that have a face value of $1,000 and pay a 9% annual coupon. Bond L matures in 15 years, while Bond S matures in 1 year. a. What will the value of the Bond...

Q:

The quality manager for a major automobile manufacturer is interested in estimating the mean number of paint defects in cars produced by the company. She wishes to have her estimate be within 0.10...

Q:

In January 2 0 0 5 , Monica started a new business. It was a web - based business that she developed. She registered the domain in her name and developed a website. In June 2 0 0 5 , Jared and Monica...

Q:

Southern Alliance Company needs to raise $55 million to start a new project and will raise the money by selling new bonds. The company will generate no internal equity for the foreseeable future. The...

Q:

Southern Alliance Company needs to raise $45 million to start a new project and will raise the money by selling new bonds. The company will generate no internal equity for the foreseeable future. The...

Q:

Titan Mining Corporation has 8.7 million shares of common stock outstanding and 230,000 6.4 percent semiannual bonds outstanding, par value $1,000 each. The common stock currently sells for $37 per...

Q:

Titan Mining Corporation has 9 million shares of common stock outstanding, 250,000 shares of 6 percent preferred stock outstanding, and 105,000 7.5 percent semiannual bonds outstanding, par value...

Q:

Organic produce Corporation has nine million shares of common stock outstanding, 500,000 shares of 6 percent preferred stock outstanding, and 200,000 of 9.4 percent semiannual bonds outstanding, par...

Q:

Write a program to wish happy birthday to a student. Firstly, take today month and day as an input and secondly take birthday as an input in the form of month and day. If the input day and month...

Q:

Wear as little as possible

Q:

Be relaxed at the hips

Q:

Do not take criticism personally, even if it is meant to be personal.