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If There Are No Profits in Competitive Equilibrium, Why Do

question 196

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If there are no profits in competitive equilibrium, why do firms produce? How can they stay in business?


Definitions:

Machinery

Equipment, especially those powered by fuel or electricity, used in the industrial production or manufacturing process.

Accumulated Depreciation

The overall depreciation cost that has been allocated to a fixed asset over the span of its useful life.

Patent Rights

Legal protections granted to inventors, giving them exclusive rights to produce, use, and sell their inventions for a limited period.

Amortization

The process of spreading out a loan or an intangible asset's cost over its useful life.

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