Positive economic profit
[DOC File]CHAPTER 7
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The economic cost is the value of the next best alternative, or the amount that the owner would earn if he took the next best job. A firm that has positive accounting profit does not necessarily have positive economic profit. True. Accounting profit considers only the explicit, monetary costs.
[DOC File]University of Dayton
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The profit maximization goal doesn’t require the firm owner to earn a positive economic profit in the short run, just the minimum economic loss. Operating a business at zero economic profit. Students are often skeptical that a zero economic profit is an acceptable outcome for a hard working entrepreneur.
[DOC File]Why Earning a Positive Net Income is Not Good Enough
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Economic profit or EVA measures the value created by a business after accounting for the cost of all resources including both debt and equity capital. The difference between EVA and accounting profit is essentially the cost of equity capital (how much return your investors demand). ... A positive EVA means the firm is generating a return to ...
[DOC File]Practice Questions 8
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positive economic profit for each firm in the short run, and exit from ths industry in the long run. negative economic profit for each firm in the short run., and entry into the industry in the long run. Answer: C. The rightward shift in the market demand curve raises the equilibrium price in the industry and results in short run positive ...
[DOC File]Topic:Profit maximization - Washburn University
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It should stay since it will be earning positive economic profit. We know this because at the firm’s optimal output (the point where MC intersects P) price exceeds average total cost. If it stays, what will be its economic profit? Profit = (P – ATC) · Q*, where Q* is the optimal output. Profit …
[DOC File]Microeconomics, 7e (Pindyck/Rubinfeld)
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C) positive economic profit it earns in the long run. D) difference between total revenue and total variable costs. E) difference between total revenue and total fixed costs. Answer: A. Diff: 3. Section: 8.7. 79) Consider the following statements when answering this question . I.
[DOC File]academic.udayton.edu
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2. A firm in monopolistic competition can earn an economic profit in the short run only if P > ATC. 3. Figure 13.2 shows a short-run equilibrium output and price decision for a firm in monopolistic competition making a positive economic profit. B. In the long run, firms in monopolistic competition will be unable to earn economic profit. 1.
[DOCX File]DavisEric.com | work hard -then- play hard… stay positive ...
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earn a positive economic profit. c. exit the industry if price is greater than average total cost. d. produce an output level at which price is greater than average total cost. e. produce a differentiated product. ____34.A perfectly competitive industry with constant costs is initially operating in long-run equilibrium. When demand increases ...
[DOC File]Economics 11
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A monopolist necessarily makes a positive economic profit. c. The quantity at which TR is maximized is greater than the quantity at which total profit is maximized. d. a change in fixed costs does not change the quantity at which monopoly profit is maximized in the short run. e. A operates on the inelastic segment of its demand curve.
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