When Existing Firms In A Competitive Market Are Profitable, An Incentive Exists For?

When firms in a competitive market are profitable, an incentive exists for them to expand.

Why do firms exit the market?

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Firms exit the market for a variety of reasons, but some of the most common reasons are: (1) competition from new entrants; (2) changes in the economic environment, such as a recession; (3) changes in the business model, such as a shift to digital services; and (4) changes in the customer base, such as a shift to online or mobile commerce.

Do firms have difficulty entering the market in a perfectly competitive market?

No, firms in a perfectly competitive market can easily enter the market.

What happens when a new firm enters a market?

When a new firm enters a market, it may face competition from other firms. This competition may lead to the new firm’s products or services being better priced or more popular. Additionally, the new firm may also face criticism from the other firms for not doing enough to compete.

What is meant by competitive firm?

A competitive firm is a business organization in which the purpose of the firm is to produce results that are superior to those of its competitors.

How do competitive markets maximize profit?

In a competitive market, each individual producer tries to maximize their profits. This means that each producer tries to make the most money possible by producing the most product.

Would firms have an incentive to change their level of production?

Yes, firms would have an incentive to change their level of production if they felt that their level of production was causing them to lose market share or be at a disadvantage in their competition.

How do firms in a perfectly competitive market determine price and profit-maximizing output levels?

In a perfect competitive market, firms would determine the price and profit-maximizing output levels by analyzing the market demand and supply curves.

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What will happen if new entrants to a competitive market have higher costs than existing firms?

If new entrants to a competitive market have higher costs than existing firms, then the market will be less efficient and the new entrants will be unable to compete.

What do firms do in competitive markets?

Firms in competitive markets typically compete by offering products and services that are more affordable, more efficient, or more innovative than those of their competitors.

Why do firms make normal profit in the long run?

Firms make normal profit in the long run because they are able to continue making profits even when the economy is in decline. This is because they can charge more for their products because they know that they will be able to sell them at a higher price in the future.

When profit maximizing firms in a competitive market are earning profits?

When profit maximizing firms in a competitive market are earning profits, they are maximizing their profits by maximizing their returns on invested capital.

When some firms leave a perfectly competitive market the price?

Firms that leave a perfectly competitive market will experience a decrease in the demand for their product or service.

When new firms enter a perfectly competitive market?

In a perfect competitive market, all firms are pricing their products to make as much money as possible. In this market, there are no substitutes for the products of the firms in the market, so firms can only make money by producing the most efficient products.

How does a perfectly competitive company determine its profit-maximizing quantity of output?

A company’s profit-maximizing quantity of output is the amount of output that produces the greatest total profit.

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When firms are said to be price takers What will happen if a firm raises its price?

If a firm raises its price, it will likely lose customers.

When a firm is making a profit-maximizing production decision?

When a firm is making a profit-maximizing production decision, it should produce as much as possible to maximize profits.

When firms are said to be price takers It implies that if a firm raises its price?

When firms are said to be price takers, it implies that if a firm raises its price, it is doing so for strategic reasons, not out of a desire to make a profit.

When firms have an incentive to exit a competitive market their exit will?

When firms have an incentive to exit a competitive market their exit will be more likely.

When new firms have an incentive to enter a competitive market their entry will quizlet?

There is no definitive answer to this question since it depends on a number of factors, such as the level of competition in the market, the nature of the new firm, and the business model. However, some general tips that may be helpful include:1. Make sure that the business model is sound and that the company can provide a good product or service.2. Make sure that the company is well-capitalized and has the financial resources to compete in the market.3. Make sure that the company is organized and has a good marketing strategy.4. Make sure that the company is well-informed about the industry and the competition.5. Make sure that the company is well-prepared for the legal and regulatory environment in the market.

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Why does a firm in a competitive industry charge the market price quizlet?

A firm in a competitive industry charges the market price quizlet because it can offer a better deal to customers than other firms.

At what point does a firm maximize profit quizlet?

When the firm can sell its products at a price that is greater than the cost of goods sold.

What is a perfectly competitive market quizlet?

A perfect competitive market quizlet is a quizlet that is designed to measure how well a market is functioning.

What will the entry of new firms into a competitive market do to market supply and market prices?

New firms in a competitive market will increase the demand for products and services, which will in turn increase the prices of those products and services.

When the conditions in a competitive price taker market are such that the firms are consistently unable to cover their production costs?

The market is not consistently unable to cover its production costs.

Would a profit-maximizing firm in a perfectly competitive market have an incentive to lower their price below the market price in order to increase market share?

Yes, a profit-maximizing firm in a perfectly competitive market would have an incentive to lower their price below the market price in order to increase market share.

When new firms have an incentive to enter a competitive price taker market their entry will?

When a new firm has an incentive to enter a competitive price taker market, their entry will be more likely. The firm will be more likely to enter a market if it believes that it can gain an advantage over its competitors through lower prices.

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Under what conditions will a competitive firm exit a market explain?

A competitive firm may exit a market if it feels that the market is not providing it with a good return on its investment.

What are the main characteristics of a competitive firm?

A competitive firm is one that is constantly in search of new ways to improve its business model and competitive edge. It is also one that is willing to risk large sums of money to achieve its goals.

Would a profit-maximizing firm continue to operate if the price in the market fell below its average cost of production provide a novel example and explain?

A profit-maximizing firm would continue to operate if the price in the market fell below its average cost of production. This is because it would be able to produce more units at a lower cost and make more money.