Answer: The correct answer is False.
Explanation:
Business behavior will not determine the ethics of society. Businesses can't be responsible to change the moral and ethical behaviors of a single person or an entire world. Only a person can change their own behavior. A society in whole can only be changed by each person acting upon their own free will.
If a business is not ethical, then they need to change the way they work and do business and lead by example.
Answer:
a. 9%
b. Yes, the firm earning an economic profit of 2%
c. Yes, Industry will see entry or exits
d. Rate of return of economy = 7%
Explanation:
a. Percentage rate of return = Earning ÷ Investment by founders × 100
= $18 ÷ $200 × 100
= 9%
b. Company rate of profit - Rate of profit of economy
= 9% - 7%
= 2% > 0
Yes, the firm earning an economic profit of 2%
c. Yes, Industry will see entry or exits because industry is competitive in nature and would to like to compete to others by satisfying the consumers . In perfect competitive markets there will be no entry or exits and critical characteristics reason companies are free for entry and exit for marginal profits.
d. Industry is competitive , there will be supplier to serve the market and its hard to decide the price of the product.
Hence, the rate of return long run equilibrium earned by firm = Rate of return of economy = 7%
<span>You supply a good at a price of $5. You also earn a profit at this price. This means that your marginal cost could be less than $5.
Hope it helps.</span>
