Question: Why do economists consider zero economic profit to be normal?

Why do economists consider zero economic profit to be "normal"?

Step by Step Solution

★★★★★

3.50 Rating (173 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

Normal is akin to equilibrium in economic theory When a ... View full answer

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

Document Format (1 attachment)

Word file Icon

935-B-E-M-E (6541).docx

120 KBs Word File

Students Have Also Explored These Related Economics Questions!

Q:

Why do economists consider growth in average labor productivity to be the key factor in determining long-run living standards?

Q:

True or False: 1. Explicit costs include both wages paid to workers and the opportunity cost of using ones own land, labor, or capital. 2. Because implicit costs do not represent an explicit outlay...

Q:

Multiple Choice Questions 1. In perfect competition, at a firms short-run profit-maximizing output, a. Its marginal revenue equals zero. b. Its average revenue could be greater or less than average...

Q:

Why do economists consider zero economic profit to be "normal"?

Q:

I. TRUEORFALSE.Explain why it is true or why it is false. thank you! for reference: Characteristics of the Perfect Competition There are many buyers and sellers in the market - One firm in a...

Q:

Worksheet 52.1: Economic Profit and Costs Review For an explanation and example of accounting versus economic profit, watch Jacob Clifford's video "Micro 3.7 Economic Profit and Costs" at...

Q:

Suppose Hoodies' demand and cost functions for selling hoodies is similar to other firms in this market. What does theory predict will happen to the price of hoodies over the long run in this market?...

Q:

Question 1 (Multiple Choice Worth 1 points) (01.01 MC) Why might salt be a resource with a high cost in one market and a very low cost in another market? Trade could affect costs. Its supply could be...

Q:

O (PC - PP) x QE Zoom out (PC - PP) x (QE - Q") x Question 3(Multiple Choice Worth 1 points) (03.02 MC) Use the graph to answer the question that follows. Price MC ATC ATC, Quantity (units) The shift...

Q:

1. Market structure analysis allows economists to: A) predict the behavior of firms. B) create the conditions of competition. C) eliminate economic profits. D) remodel the economy. 2. The perfectly...

Q:

2- In water, ratie of exygen to hydrogen by atoms is A-2:1 B- 1:2 C-8:1 D- 1:8 3- Isotopes are atoms of the same element with different numbers of A- Protons B- Electrons C- Neutrons D- Positron 4...

Q:

In an experiment to compare the effectiveness of two drugs A and B in reducing blood glucose concentrations, drug A was administered to 25 patients, and drug B was administered to 15 patients. The...

Q:

Qutition 2 1 Land with a basis of $ 2 , 0 0 0 and a value of $ 5 0 , 0 0 0 is distributed to an individual shareholder inho hars dividend incorne of $ 5 0 , 0 0 0 . $ 5 0 . 0 0 0 . True False

Q:

The marginal propensity to save is a. the change in saving induced by a change in consumption. b. (change in S) / (change in Y). c. 1 MPC / MPC. d. (change in Y bY) / (change in Y). e. 1 MPC.

Q:

Which of the following products and services are likely to encounter adverse selection problems: golf shirts at traveling pro tournaments, certified gemstones from Tiffanys, graduation gift travel...

Q:

If notorious firm behavior (i.e., defrauding a buyer of high-priced experience goods by delivering low quality) becomes known throughout the marketplace only with a lag of three periods, profits on...

Q:

1. Does easy access to distribution channels at grocery stores for Redboxs 22,000 vending machines indicate high or low entry threat in the movie rental business? Why? Why might McDonalds be an even...

Q:

Which of the following is NOT considered a fundamental principle of ethics in accounting according to the International Code of Ethics for Professional Accountants? a ) Professional competence and...

Q:

Compute the total and annual returns on the described investment. Four years after buying 100 shares of XYZ stock for $80 per share, you sell the stock for $12.500. The total return is % (Do not...

Q:

Look at the attached scatterplot below that compares Per Capita Meat Consumption and Colon Cancer incidence per country. Now that you are equipped with the concept of correlation, do you think that...