Question
In the long run, the economic profit for a perfectly competitive firm will be
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Economic profit is calculated as total revenue minus total costs, where total costs include both explicit costs (like wages, rent, and materials) and implicit costs (like the opportunity cost of capital). Show more…
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In the short run, a purely competitive firm that seeks to maximize profit will produce:
In the long run a firm under monopolistic competition faces a no-economic profit no-loss situation.
Under monopolistic competition in the short run, the firm may earn supernormal profits.
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