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Pavel [41]
3 years ago
12

The basic model of pure competition reviewed in this chapter finds that in the long run all firms in a purely competitive indust

ry will earn normal profits. If all firms only earn a normal profit in the long run, firms will develop new products or lower-cost production methods because they can:_________.a) innovate and possibly earn an economic profit in the short run. b) improve their management and earn an economic profit in the long run. c) eliminate competition. d) innovate and possibly earn a normal profit in the short run.
Business
1 answer:
Helen [10]3 years ago
7 0

If all firms only earn a normal profit in the long run, firms will develop new products or lower-cost production methods because they can innovate and possibly earn an economic profit in the short run.

Explanation:

Competition involves constant efforts by companies and executives to do more than the loss (normal gains) of new goods or by improving ways to manufacture current products at lower prices. Therefore, if businesses can invent, they will achieve short-term economic advantage.

Economic benefit encourages entry, economic losses lead to exit and firms in a highly profitable market earn little economic income in a long-term equilibrium. In an industry where inflation does not change the costs of materials (a market with a constant cost), the long-term supply curve is a horizontal line.

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The slope of a country's production possibility frontier with cloth measured on the horizontal and food measured on the vertical
user100 [1]

Answer:

MPLF/MPLC; becomes steeper

Explanation:

The slope of a country's production possibility frontier with cloth measured on the horizontal and food measured on the vertical axis in the specific factors model is equal to MPLF/MPLC and it becomes steeper as more cloth is produced.

Where

- MPLC is Marginal Product of Labor for Cloth.

- MPLF is Marginal Product of Labor for Food.

5 0
3 years ago
Read 2 more answers
Suppose the annual rate of inflation has been 3 percent during each of the last three years and that borrowers and lenders have
tatyana61 [14]

Answer:

a.borrowers gain at the expense of lenders.

Explanation:

Suppose the annual rate of inflation has been 3 percent during each of the last three years and that borrowers and lenders have come to expect this rate of inflation. If the inflation rate unexpectedly rises, then borrowers gain at the expense of lenders.

As inflation increases, two things happen

1. The amount of interest paid to lenders technically becomes of smaller value and lenders are loosing while borrowers are paying lesser

2. As inflation sets in, wages are increased to compensate for inflation and since the borrower already owed money before the inflation occurred, now he or she has more money in his or her paycheck to pay off the debt.

8 0
3 years ago
Liability insurance is…
Kaylis [27]

Answer:

D

Explanation:

Liability means being responsible for something, usually by law, so liability insurance is when insurance protects you from charges from the other party's injuries and/or damage to their car in the case of an accident.

6 0
2 years ago
January 1, 2021, Woody Forrest Corporation granted executive stock options to purchase 41,000 of its common shares at $9 each. T
ICE Princess25 [194]

Answer:

174,250 shares

Explanation:

The computation of the number of shares to be used in computing diluted earnings per share is shown below:

Proceeds from exercise of options (a)  $369,000  (41,000 shares × $9)

Used to repurchased for common stock (b) 30,750 shares (41,000 shares × $9 ÷ $12)

Number of shares for exercised (c)                           41,000 shares

Less: repurchased shares (d)                                    -30,750 shares

Diluted common shares {e = c - d}                             10,250 shares

Add: Common shares (f)                                             164,000 shares

Total number of shares for diluted earning per share 174,250 shares

We ignored the market price of common stock as it is not relevant.

8 0
3 years ago
On April 1, Lewis Company paid $14,400 for two years of insurance in advance. Lewis Company recorded the transaction by debiting
Dominik [7]

Answer:

31 Dec       Expense A/c Dr.                      $5,400

                         To Prepaid Expense A/c                   $5,400

(Therefore, expense for the current financial year recorded)

Explanation:

We know that at the time of insurance paid in advance on 1 April for 2 years, entry was;

Prepaid Insurance A/c Dr.            $14,400

                 To Cash A/c                                      $14,400

Now at year end the expense relating to current period shall be recognized properly in the books, so that matching principle of revenue against expenses shall be matched.

Thus, period from 1 April to 31 December = 9 months

Expense for 9 months = 14,400 \times \frac{9}{24} = 5,400

That means expense for the year = $5,400

Therefore, entry for such recording will be:

31 Dec       Expense A/c Dr.                      $5,400

                         To Prepaid Expense A/c                   $5,400

(Therefore, expense for the current financial year recorded)

6 0
3 years ago
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