economic profit and market power

Related BrainMass Solutions

• Sources of economic profit

  The three basic sources of economic profit are risk taking, innovation, and market power. In situation a, the company is profiting because of both innovation and market power.

• Competitive Market vs. Monopolisitc Pricing

  So firms will leave the market if they suffer an economic loss and will enter the market if they see other firms enjoying an economic profit. Thus in the end, firms that remain in this market enjoy zero economic profits.

• Monopolist Chance of Making a Long-Run Economic Profit

  On the contrary, a perfectly competitive market is free for entry to new producers, and in the long run, the economic profit for each firm reduces to zero.

• Monopoly vs. Monopolistic Competition in the Long Run

  Why monopolists can earn a long-run economic profit but monopolistic competitors can't, and a list of factors that could erode a monopolist's market power.

• Monopolistic Competition, Monopoly, and Oligopoly

  The market price will continue to fall until an equilibrium is reached where all the firms in the market are making an economic profit of zero.

• Pricing and output decisions

  In the long run, if a firm is earning economic profits, more firms will enter the market. If the firm is incurring economic losses, then firms will leave the market. In the long run a firm will earn normal or zero economic profit. d) FALSE.

• perfectly competitive firm

  incur an economic loss c) might; might Firms that sell a good or a service in a perfectly competitive market have no market power, since they are price takers.

• perfectly competitive market, monopolistic market, monopolistic competitive market and an oligopolistic market

  A monopoly is the other extreme of the market, and is characterized by the following: - Single firm, or one dominant firm - No close substitutes - Barriers to entry and/or exit - Positive economic profit - Monopolist decides the market price Note

• Simple questions on basic economics

  increases the bargaining power of employers restricts output. Answer: enhances product-market competition.