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3 years ago

Analyze and identify the role of the government in a free enterprise economy.

1 answer:

4 0

A free enterprise economy is the idea that a capitalist economy can maintain itself in a freely competitive market due to a the supply and demand relationship. Since this concept claims that the economy can regulate itself, the government has a minimalist role in it.

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Assume a purely competitive firm is selling 200 units of output at $3 each. At this output, its total fixed cost is $100 and its

raketka [301]

The correct option is: maximizing its profit, but not necessarily the maximum profit.

<h3>What is Profit Maximization in a Perfectly Competitive Market ?</h3>

The perfectly competitive firm can choose to sell any quantity of output at exactly the same price. This implies that the firm faces a perfectly elastic demand curve for its product: buyers are willing to buy any number of units of output from the firm at the market price.

When the perfectly competitive firm chooses what quantity to produce, then this quantity—along with the prices prevailing in the market for output and inputs—will determine the firm’s total revenue, total costs, and ultimately, level of profits.

A perfectly competitive firm has only one major decision to make—namely, what quantity to produce. To understand why this is so, consider the basic definition of profit:

Profit=Total revenue−Total cost

(Price) (Quantity produced)−(Average cost) (Quantity produced)

According the question scenario,

Given:

Firm is selling = 200 units

output = $3 each

fixed cost = $100

variable cost = $350

solution:

Total average cost = variable cost + fixed cost .........(1)

Total average cost = 350 + 100

Total average cost = $450

Cost per unit = average cost ÷ no of unit ...................(2)

Cost per unit = 450 ÷ 200

Cost per unit = $2.25

So here firm is incurring per units is $2.25 but here earning per unit is $3.

So that here firm is earning economic profit as here market price is greater than earning maximum profit.

Therefore, we can conclude that the correct option is : maximizing its profit, but not necessarily the maximum profit.

Learn more about Profit Maximization on:

brainly.com/question/13464288

#SPJ4

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2 years ago

What Is An Tsunami ill Give Brainliest If Right

Xelga [282]

Answer: A tsunami is a series of great sea waves caused by an underwater earthquake, landslide, or volcanic eruption.

Explanation:

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3 years ago

Using _____ requires gathering a lot of information about customers’ preferences and shopping patterns, and some customers get i

coldgirl [10]

Answer:

Personalization.

Explanation:

Using personalization in customer relationship management (CRM) requires gathering a lot of information about customers’ preferences and shopping patterns, and some customers get impatient with answering long surveys about their preferences.

This ultimately implies that, personalization deals with gathering information about a specific customer's choice such as taste, requirements, product preferences, shopping styles or patterns in order to be able to serve him or her better, through the provision of goods and services that meets their needs.

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3 years ago

How does the merchandising cycle move fashion forward? FASHION MERCHANDISING

Anvisha [2.4K]

Fashion merchandising is the promotion of apparel sales and involves all of the tasks necessary to deliver the clothing requests and meet the needs of potential customers and designers.

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3 years ago

Short-term bond yields are generally ______ than long-term bond yields, whereas long-term bond prices are generally ________ tha

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1. More volatile
2. More volatile
Enjoy the holidays, I hope this helps inshallah!

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3 years ago