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In Long-Run Equilibrium for a Perfectly Competitive Market, No Firm

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Essay

In long-run equilibrium for a perfectly competitive market, no firm earns extra-normal profits. Describe why firms that earn zero extra-normal profits would stay in business.


Definitions:

Feasible Region

In optimization problems, the set of all possible points that satisfy the constraints, representing solutions that meet the problem's criteria.

Constraints

Limitations or restrictions that impact the options available for decision-making or problem-solving.

Linear Programming

A mathematical methodology for optimizing a linear objective function, subject to linear equality and linear inequality constraints.

Objective Function

A mathematical expression representing the goal of an optimization problem, typically to maximize or minimize some quantity.

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