Economics Questions

Running Head : Economics QuestionsName of StudentInstitutionName of ProfessorDate of SubmissionHYPERLINK javascript :display _3855551_1 _3855551_1 layer_5 DemandIf in a perfectly competitive food market consume go , what allow for happen to the number of firms and profits of firms in the concise endure and in the pine run ? WhyPerfectly competitive markets unremarkably bind perfectly elastic direct curves . For the firms in much(prenominal) a market , profit maximization occurs when then the marginal make up are equal to marginal revenue (MC MR . This is at a point when firms are earning zero economic profit . When demand falls , the firms will have their total costs prodigious their total revenue and will therefore make losings . To survive , the firms will possibly have to shut electric pile in the short term until there go forward in operations only a few firms satisfactory of making zero economic profit again . In long run when market conditions are likely to modify and prices to development , the firms can resume production .

This means that firms in such a market cannot make losses indefinitely . rather , the firms must make sufficient revenue to encompass their expenses . notwithstanding then can they decide whether to remain in that patience or to venture in business elsewhereHYPERLINK https /bbhosted .cuny .edu /webapps /discussionboard /do / put across ?action lis t_messages forum_id _320658_1 course_id _329281_1 nav discussion_board_e ntry conf_id _317924_1 message_id _3855549_1 Ef ficiencyWhy is Perfect Competition considere! d the close to efficient market structurePerfect competition is considered the most efficient market structure for a number of reasons...If you want to get a full essay, direct it on our website: OrderEssay.net

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