Draw a Competitive Firm in Each of the Following Situations

question 119

Essay

Draw a competitive firm in each of the following situations. 1 a. earning abnormal profits b. making losses c. Are either of the situations in (a) and (b) sustainable into the long run? If not, explain why and graphically demonstrate how the competitive firm is expected to behave in the long run.

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Definitions:

Draft

A preliminary version of a document or plan that is subject to revisions or editing.

Holder in Due Course

A legal term referring to a party that has acquired a negotiable instrument, like a check, in good faith and has the right to collect the face value of the instrument without any defenses.

Bankruptcy

A legal process through which individuals or businesses unable to meet their financial obligations can seek relief from some or all of their debts.

Real Defense

In negotiable-instruments law, any defense that can be used against everyone, including holders in due course. Also called absolute defense and universal defense.