how to firms survive in Perfect Competition?
In the short term, They have zero Economic profit....so earn only Normal Profit i.e. the wages the entrepreneur earns....
They Can expand upto a point where the long term cost is at minimum point.....
So they dont earn any profit....
so how do they earn a profit ?
Is it by producing a variant of the product and earn a profit until some firms see this opprotunity and enter the market and decreses the profit to zero....and so on
So why are they in this business....They better keep their money in a bank which may give an interest same as opportunity cost
And lastly ...a very frank question...does a pure competition scenario ever occur? any examples???
Thanks!!!
Edited 2 time(s). Last edit at Wednesday, September 16, 2009 at 08:16AM by varundarji. |
发表于 2011-7-13 15:54
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