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Westkost [7]
3 years ago
9

A competitive market is in long-run equilibrium. if demand increases, we can be certain that price will

Business
2 answers:
Aloiza [94]3 years ago
8 0

<em>A competitive market is in long-run equilibrium. if demand increases, we can be certain that the price will </em><em>increase because there is less supply .</em>

<h2>Further Explanation </h2>

In macroeconomics, long-run equilibrium occurs when the aggregate demand curve intersects the short-run aggregate supply curve at the point of the long-run aggregate supply curve. At this point, a country's actual real GDP will be equal to potential GDP. The unemployment rate will be at the natural rate, leaving only frictional unemployment and structural unemployment.

Long-term equilibrium is where the economy settles in a long-term macroeconomic balance. But economic equilibrium often deviates from the long run. This occurs due to fluctuations in short-term aggregate supply and aggregate demand.

Fluctuations in the economy occur when real GDP deviates from potential GDP. These fluctuations occur in the short term and form what we call the business cycle. Deviations from real GDP to potential PBB are called gaps, where when real GDP is higher than potential GDP, there is an inflation gap and when real GDP is lower than potential GDP, there is a recessionary gap.

To moderate the short-term gap, so that it is not too large, the government can use fiscal policy as a tool and the central bank can use monetary policy as a tool to close this gap and return to long-term equilibrium.

Learn More

long-run equilibrium brainly.com/question/6827219

macroeconomics brainly.com/question/6827219

Details

Class: High School

Subject: Business

Keyword: equilibrium, macroeconomics, long-run

bogdanovich [222]3 years ago
6 0
In this situation, we can be certain that price will <span>fall in the short run. All, some, or no firms will shut down, and some of them will exit the industry. Price will then rise to reach the new long-run equilibrium.
When demand increases, more and more companies will try to lower the price of the products so they are favored among their competitors. Because of the harsh competition, some firms will not receive enough sales and will opt out to close down their business but some will survive and thrive.</span>
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What is Jared's accounting profit? Suppose Jared could have used his talents to run a similar kind of business instead. If he va
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Answer:

Explanation:

I think your question is missed of key information, allow me to add in and hope it will fit the original one.  

<em>After working as a head chef for years, Jared gave up his $60,000 salary to open his own restaurant last year. He withdrew $50,000 of his own savings that had been earning 4% interest and borrowed another $100,000 from the bank at a rate of 5%. As the restaurant space he was leasing had no separate office, Jared converted his basement apartment into office space. He had previously rented the apartment to a student for $300/month. The following table summarizes his operations for the past year. </em>

<em>Total sales revenue    $590,000       </em>

<em>  Employee wages $120,000   </em>

<em>  Materials                 $350,000   </em>

<em>  Interest on loan $5,000   </em>

<em>  Utilities                 $10,000   </em>

<em>  Rent                 $25,000   </em>

<em>Total explicit costs              $510,000 </em>

<em>a, What is Jared's accounting profit? </em>

<em>b, Suppose Jared could have used his talents to run a similar kind of business instead. If he values his entrepreneurial skill at $10,000 annually, find Jared's total implicit costs. </em>

<em>c, What was Jared's economic profit last year?</em>

My answer:

a. , What is Jared's accounting profit?

As we know that accounting profit is the difference between total sales revenue and Total explicit cost, from the table we can find that:

$590,000  - $510,000  = $80,000 is the accounting profit

b. Jared's total implicit costs.

Implicit costs include his foregone wages ($60,000), the value of his entrepreneurial skill ($10,000), foregone rent on the apartment ($3,600 = 12 x $300) plus the foregone interest on his savings ($2,000 = .04 x $50,000). These total $75,600.

c. What was Jared's economic profit last year?

Explicit plus implicit, was $585,600 = $510,000 + $75,600. His economic profit is the difference between revenue and economic cost, or $4,400 (= $590,000 – $585,600).

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uzz Appliances manufactures two products: Food Processors and Espresso Machines. The following data are available: ​ Food Proces
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Answer:

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A behavioral example is when teachers recompense their classes or certain students for good behavior at the end of the week with special benefits. Penalties are used to use the same principle. If the student is wrong, the professor may take some privileges away.

Cognitive theory is a theoretical approach that aims to clarify your actions by understanding the patterns of thinking.

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