Briefly Explain the Nature of a Perfectly Competitive Firm

question 16

Essay

Briefly explain the nature of a perfectly competitive firm. Briefly discuss the effects of new entrants into a perfectly competitive market on existing firms that have profits in the short run.

---

Definitions:

Net Sales

The sum of sales income remaining after subtracting the value of returns, allowances for damaged or missing items, and discounts.

Acquired Assets

Assets obtained through purchase or merger, typically contributing to the owner's financial position.

Appraised

The process of estimating the value of an asset or property, often conducted by a professional appraiser.

Allocated Cost

Expenses that have been assigned to a specific product, service, department, or project.