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Marat540 [252]
2 years ago
10

In a properly functioning economic market, where does the economic value created by firms go? in other words, who gets it? why?

Business
1 answer:
Karolina [17]2 years ago
7 0

The value created by firms in the form of goods and services are distributed among various economic entities that consume them such as private consumers, government etc. But a closed circular flow diagram does not depict the other external values created. For example, a private college is a firm that produces education or provides education as a service to individuals who pay for it. This has a positive externality on society since these students can later teach others in society. Also firms produce under certain conditions and surveillance.

Firms can gain a certain control over society by studying the elasticities of demand. Also, firms generate certain expectations regarding wages and other social benefits. On the other hand, firms are controlled by governmental policies such as minimum wage laws, pricing laws etc. Such policies bind the full potential output if the potential output is not in confluence with social goals or maximization of social welfare.

Learn more about economics here: brainly.com/question/2824360

#SPJ4

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Natali [406]

Answer:

Exit the market.

Explanation:

Suppose there are X firms in a competitive market and they are all making normal profits. If the demand for their products decreases, some of the firms will start to sell less, which will result in lower profits or even losses. In the long run, those firms that experience lower sales resulting in lower profits or losses, will exit the market. Once these firms exit the market, the quantity supplied should decrease, which will result in a price increase.

4 0
4 years ago
Jonas, an individual, acquired a building nine years ago for $650,000. He sold it in the current year for $680,000 when its adju
lakkis [162]

Answer:

Jonas must recognize a long term capital gain = $680,000 - $500,000 = $180,000

Since this gain is originated from the sale of a property, it will be considered a capital gain. If the property was held for less than a year before it was sold it would be considered a short term capital gain, but in this case the property was held for 9 nines, therefore, it is considered a long term capital gain.

5 0
4 years ago
The company owns 9,000 acres of timberland purchased two years ago at a cost of $1,400 per acre. At the time of purchase, the la
BigorU [14]

Answer:

See below

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First, we will calculate the depreciation expenses

Depreciation expense = Cost / life = $84,000 / 30 = $2,800 per year

6 0
3 years ago
When a development team is having trouble delivering a working increment because they don't understand a functional requirement?
Aleksandr [31]
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Why would expanding the nation's communications network be considered an increase in wealth, while improving the education of it
Alla [95]
First of all because of the writable assets. Communication network can be considered as a infrastructure
Meanwhile, there is no solid way (in term of pure numerical) to measure the quality of education.
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