Question: According to the basic model of pure competition, in the long run all firms in a purely competitive industry will earn normal profits. If all

According to the basic model of pure competition, in the long run all firms in a purely competitive industry will earn normal profits. If all firms earn only a normal profit in the long run, why would any firms bother to develop new products or lower-cost production methods? Explain.

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:

What are generally accepted accounting principles (GAAP)? Who currently develops and issues GAAP? What is the purpose of GAAP?

Q:

According to the basic model of pure competition, in the long run all firms in a purely competitive industry will earn normal profits. If all firms earn only a normal profit in the long run, why...

Q:

1.Explain why firms in pure competition may earn short run economic profits or losses but will earn normal profits in the long run. 2.Explain the long run supply curve in an increasing cost industry...

Q:

5. The basic model of pure competition reviewed in this chapter finds that in the long run all firms in a purely competitive industry will earn normal profits. If all firms will only earn a normal...

Q:

The basic model of pure competition reviewed in this chapter finds that in the long run all firms in a purely competitive industry will earn normal profits. If all firms will only earn a normal...

Q:

The basic model of pure competition reviewed in this chapter finds that in the long run all firms in a purely competitive industry will earn normal profits. If all firms will only earn a normal...

Q:

The basic model of pure competition reviewed in this chapter finds that in the long run all firms in a purely competitive industry will earn normal profits. If all firms will only earn a normal...

Q:

The basic model of pure competition reviewed in this chapter finds that in the long run all firms in a purely competitive industry will earn normal profits. If all firms will only earn a normal...

Q:

The basic model of pure competition reviewed in this chapter finds that in the long run all firms in a purely competitive industry will earn normal profits. If all firms will only earn a normal...

Q:

7. The basic model of pure competition reviewed in this chapter finds that in the long run all firms in a purely competitive industry will earn normal profits. If all firms will only earn a normal...

Q:

1. The basic model of pure competition reviewed in this module finds that in the long run all firms in a purely competitive industry will earn normal profits. If all firms will only earn a normal...

Q:

Ivanhoe Rook Candies received a bank statement for the month of August 2014, which showed a balance per bank of $6,964. The company's cash account in the general ledger showed a balance of $6,248 at...

Q:

While playing golf, Bills ball hits another golfer in the head. Bill yelled a warning before the victim, Bob, was hit. Bob claims not to have heard the warning, and sues Bill for $60,000 in medical...

Q:

Solve a Consumers' o r Producers' Surplus Problem. A sports watch has a price - demand equation given b y p = D ( x ) = 5 5 * 2 - 0 . 0 2 0 7 7 0 8 x dollars, which gives the price per watch when x...

Q:

Juana was trying to decide whom to vote for in an upcoming election. After reviewing the candidates, she said, Ive decided to vote for Gary because I just feel better about him. Is Juanas decision...

Q:

What are the important shortcomings of the real business cycle model?

Q:

Read each of the following research scenarios and then fill in the correct answer in each column of the table. Number of Number of Number of Number of independent experimental possible variables...

Q:

What is the minimum number of nodes in a wavl tree of height 7?

Q:

A significant percentage of U.S. corporations are closely held corporations, with the stock of such corporations often owned predominandy or exclusively by family members. Using die internet as your...

Q:

Questions 1. Can lewn tianuficturing be ased in covironments eutside of the shop hour? R. Nlarks) 2. Cinsiater a problem: 'Detiveriet are act cumpleied by 4pm. Lsing Five Why Each 1 mark) Quesion 1:...

Q:

1. To understand how to set goals in a communication process

Q:

11. How often have you passed on to others this type of information, which you have filled in yourself? Never, then you should think again.

Q:

9. Think of any experience that has made a very strong impression on you, and where it did not go the way you thought it would. Imagine this experience as a movie in your inner theatre. Run this...