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If Identical Firms That Remain in a Competitive Market Over

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Essay

If identical firms that remain in a competitive market over the long run make zero economic profit, why do these firms choose to remain in the market?


Definitions:

Marginal Cost

Marginal cost is the additional cost incurred from producing one more unit of a good or service.

Producing Bagels

The process of making bagels, which involves mixing, shaping, boiling and then baking dough, typically in a commercial or artisanal bakery setting.

Total Cost

The complete cost of producing a specific quantity of goods or services, including fixed and variable costs.

Average Fixed Cost

Production's unchanging overheads split by the volume of goods produced.

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