Draw a graph representing a perfectly competitive firm earning an economic profit. (Make sure to show both the firm and the industry graphs) What happens over-time, if many firms are earning economic profits? Is this good or bad for consumers? Explain.

Draw a graph representing a perfectly competitive firm earning an economic profit. (Make sure to show both the firm and the industry graphs) What happens over-time, if many firms are earning economic profits? Is this good or bad for consumers? Explain.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter12: Firms In Perfectly Competitive Markets

Section: Chapter Questions

Problem 12P

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Question

Draw a graph representing a perfectly competitive firm earning an economic profit. (Make sure to show both the firm and the industry graphs)

What happens over-time, if many firms are earning economic profits?

Is this good or bad for consumers? Explain.

Note: don't use chat gpt

Definition Definition Structure of the market that exists when many buyers and sellers exchange similar commodities and prices are fixed by market forces, demand, and supply. When there is perfect competition, a single business cannot impact the price or market value of the homogenous product.

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Step 3: If many firms are earning economic profits:

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Step 4: Is this good or bad for consumers:

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