Business, 23.04.2021 15:40 staffordkimberly
A firm in a purely competitive industry has a typical cost structure. The normal rate of profit in the economy is 8 percent. This firm is earning $15 on every $150 invested by its founders.
Instructions: Enter your answers as whole numbers.
a. What is its percentage rate of return? percent.
b. Is the firm earning an economic profit? .
If so, how large? percent.
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? percent.
Answers: 2
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A firm in a purely competitive industry has a typical cost structure. The normal rate of profit in t...
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