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Marina CMI [18]
2 years ago
15

the graph to the right depicts the per unit cost curves and demand curve facing a shirt manufacturer in a competitive industry

Business
1 answer:
ladessa [460]2 years ago
4 0

Firms will continue to join this market until the industry as a whole begins to make a typical economic profit. To encourage new enterprises to enter the market, short-term profits motivate them to do so. In the long run, businesses will produce a normal or even negative economic profit.

<h3>What is a competitive industry?</h3>

Companies may join and depart the market easily in a competitive sector since there are minimal barriers to entry.

Generally, the equation for Profit per unit  is  mathematically given as

P= Price - ATC

Therefore

P= $7.49 - $6.63

P= $0.86

In conclusion, Profits in the short term encourage new businesses to join the market. Firms will make a typical or even negative economic profit in the long term.

Read more about the competitive industry

brainly.com/question/27286765

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