1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Furkat [3]
3 years ago
13

A firm in a purely competitive industry has a typical cost structure. The normal rate of profit in the economy is 7 percent. Thi

s firm is earning $18 on every $200 invested by its founders.
Instructions: Enter your answers as whole numbers.


a. What is its percentage rate of return?

b. Is the firm earning an economic profit?

If so, how large?

c. Will this industry see entry or exit?

d. What will be the rate of return earned by firms in this industry once the industry reaches long-run equilibrium?
Business
1 answer:
Mrrafil [7]3 years ago
4 0

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%

You might be interested in
You purchased 500 shares of Barden Enterprises stock for $55.43 per share at the beginning of the year. The stock is currently p
krok68 [10]

Answer:

Dividend yield is 2.91 %.

Explanation:

Dividend yield = Annual Dividend per Share / Stock Price per Share × 100

<em>where,</em>

Annual Dividend per Share = Total Dividends ÷ Total Number of Shares

                                              = $835 ÷ 500

                                              = $1.67

<em>then,</em>

Dividend yield = $1.67 / $57.48 × 100

                        = 2.905 or 2.91 %

4 0
3 years ago
What is a mixed economy?
Jet001 [13]
 A mixed economy is <span>a system mixing private and public enterprises.</span>
5 0
3 years ago
Read 2 more answers
How to calculate the probablility that 2 or more people in a group have the same birthday?
Helen [10]
Check this link it should be a great help http://mathforum.org/dr.math/faq/faq.birthdayprob.html
8 0
3 years ago
Check out this app! It's millions of students helping each other get through their schoolwork. https://brainly.app.link/qpzV02Ma
kakasveta [241]

Answer:

Check out this app! It's millions of students helping each other get through their schoolwork. https://brainly.app.link/qpzV02MawO

8 0
2 years ago
A nation can achieve higher economic growth if: Group of answer choices it devotes more resources to research and development. t
Alchen [17]

Answer:

devotes more resources to research and development.

Explanation:

Economic growth is the rise in the GDP of a country.

A country can increase economic growth by :

  • increasing labour productivity
  • increasing capital
  • increasing technological progress
  • By devoting more resources to research and development
6 0
2 years ago
Other questions:
  • Analyze Cityscape Hotels Cityscape Hotels has 200 rooms available in a major metropolitan city. The hotel is able to attract bus
    5·1 answer
  • How do I add people on here?
    12·2 answers
  • The ratio of the increase in ________ to the increase in ________ is called the multiplier.
    5·1 answer
  • Martinez Company’s relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, its ave
    13·1 answer
  • Who wants to talk to me? (NO POLITICS) PLZ :(
    9·2 answers
  • When a tax is levied on sellers of tea,a.the well-being of both sellers and buyers of tea is unaffected.b.sellers of tea are mad
    12·1 answer
  • g 1)Which of the following strategies are used by business firms to capture consumer surplus?1)A)Two-part tariffsB)Price discrim
    14·1 answer
  • Suppose that Par, Inc., management encounters the following situations:
    12·1 answer
  • On December 31, after adjustments, Gonzalez Company's ledger contains the following account balances: 101 Cash $ 27,200 Dr. 111
    15·1 answer
  • The first step in the control process is ________. A) setting the desired morals
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!