The assumption in perfect competition that there is an easy entry and exit from the market implies that firms will make a zero economic profit in the long run.
<h3>Why do firms make a zero economic profit?</h3>
In a pure competition, companies are allowed to freely enter and leave.
They take advantage of this to enter a market when prices are high and economic profit is being made.
As more firms enter, the economic profit keeps decreasing as prices decrease until this profit gets to zero and then turns to economic losses.
At this point, some firms will leave the market to stop making losses. When they do, the supply will decrease which leads to prices rising once more.
The cycle will then repeat itself and keep the companies at a zero economic profit in the long run.
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Screening. This is the process of gathering a focus group, distributing the product and gathering the opinions of the group before selling the product
Answer:
The requirement of the question is below:
Post the transactions to T accounts. (Post entries in the order displayed in the problem statement.)
The postings of the transactions to t accounts are found in the attached
Explanation:
In doing the post , I have observed strictly the rule of double that the giving account be credited and the receiving account be debited.
Also,this could be done understanding that assets ,expenses and drawings should be debited when they increase and the reverse when there is reduction.
Besides, liabilities,capital and income should be credited when they increase and the reverse for the opposite.
Check the highlighted balances as well and note that the balances are named after the side with balance brought down.
Answer:
A. Milk
I hope this helps,if not sorry
Answer: $2,750
Explanation: This is a simple interest problem, we calculate thus:
Principal = $2,500
Time = 5 years
Rate = 2%
Formula:
I = (P x R x T)/100
I = (2,500 x 2 x 5)/100
I = 25,000/100
I = 250.
Therefore the amount that will be owed at the end of 5 years is:
$2,500 + $250 = $2,750.
