Normal profit
Normal profit signifies zero economic profit. Explain why?
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Answer: Assume that the existing firms are earning over normal profits. Attracted by the positive gains, the new firms enter in industry. The market supply rises and the price comes down. New firms carry on entering and the price persists to fall till economic profits are decreased to zero.
In condition of losses, firms begin leaving the industry, supply downs and prices begins going up and all this carry on till losses are wiped out. Remaining firms in industry then once again earn only normal profits or zero profit.
The social value of additional output from the additional units of labor is as: (1) Marginal revenue product [or MRP] of labor. (2) Wage rate or price of the labor. (3) Average revenue product [or ARP] of labor. (4) Value of marginal product [or VMP] of labor. (5) Mar
The economy consists of a single buyer and a single seller. The buyer has the utility function b ln xB1 + xB2 with b ≤ 10. The seller has the
The firm's objective within price discrimination is to: (w) make the community better off economically. (x) make several consumers better off economically. (y) increase revenue and profit. (z) minimize average cost. Q : Approximate unitary price elasticity of Nostalgia Corporation’s output of “Silver Screen Classic” DVDs consequent to the point where demand has unitary price elasticity is approximately: (1) 3 million copies. (2) 4 million copies. (3) 5 million copies. (4) 6.5 million copi
Nostalgia Corporation’s output of “Silver Screen Classic” DVDs consequent to the point where demand has unitary price elasticity is approximately: (1) 3 million copies. (2) 4 million copies. (3) 5 million copies. (4) 6.5 million copi
The ban on assault weapons enacted in the year 1994 lapsed in the year 2004. Prices for assault weapons fell in year 2004 since the only way to get such guns throughout the ban was via the black market. This modify in the law in year 2004 is most probable to shift the
Economic rent by a parcel of land is positively associated to the: (w) savings in transaction costs yielded by its location. (x) amount of idle land adjacent to this. (y) time this has been held by the current landowner. (z) amount of natural flora an
Describe properties of the production possibilities curve.
expectations of price hike for durable goods tend to:
All currency issued by central bank is its monetary liability. Explain how? Answer: The Central Bank is grateful to back the currency with assets of equivalent valu
Assume that an existing apartment complicated is predicted to generate a consistent net of $1,250,000 cash flow per year into rent, after deducting all recurring variable costs (for example, taxes, utilities, and maintenance). When th
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