2 thoughts on “Is no manufacturer in the industry lose money when long -term balance?”
Beatrice
In the long -term balance, no manufacturer will lose money. I, long -term equilibrium is to achieve normal profits, but economic profits (also known as excess profits) are 0. Division of normal profits and excess profits: To produce production, the value of all the information and the personal value of the company itself is a cost. After production, it can only make up for the income of this part of value, which is a normal profit. That is to reach the income that does not make money. The value obtained through production exceeds this part is excessive profits, that is, economic profits. If only normal profits are obtained, it is to make up for the original material value and the value of workers, but entrepreneurs do not have other gains, which is equivalent to a busy life. Operation is a profitable activity. , why the economic profit is 0: Long -term equilibrium conditions are: LAR = LAC's long -term average income is equal to long -term average costs, so do not make money or not. So the economic profit is 0. Manufacturers who fully compete in the market enter or exit a industry with profits. It is the adjustment of production factors between various industries. Production factors will always flow to industries that can obtain more profits. It is this adjustment that makes the profit when the long -term balance of competitive manufacturers is zero. not doing money without making money, but under the condition of complete competition, the production factor flows freely, and manufacturers freely enter and exit the industry. When a industry profit is profitable, some manufacturers will enter. Increased quantity, the supply of products on the market increases, the market price has gradually declined, and the profit of a single manufacturer will gradually decrease until zero, and no manufacturers will enter. Conversely, when a manufacturer of a industry is losing money, then the manufacturer will withdraw from the industry. The supply of goods will be reduced, the market price will increase, and the loss will be reduced until zero. three, complete competition, also known as pure competition, is a market structure that is not hindered and interfered, refers to the markets that do not exist in companies or consumers that affect prices. It is the ideal market competition state in economics, and it is also one of the typical market forms. It can be proved that the result of complete competition is in line with Pareto. Complete competition is such a market structure. There are many sellers in homogeneous products. No seller or buyer can control the price, it is easy to enter, and resources can shift from one user to another at any time. For example, many agricultural products markets can be regarded as infinitely similar to the complete competitive market, but it is not the same, because the complete competitive market is ideal. (2) In the long run, all production factors inputs are variable. Completely competitive enterprises can achieve a balanced condition MR = LMC that maximize profit through adjustment of all production factors input. Under the conditions given to the market price of complete competition, the adjustment of all production factors in long -term production can be manifested as two aspects. On the one hand, it shows the choice of the optimal production scale. Decisions of an industry.
Theoretically, no manufacturer in the industry will lose money when long -term equilibrium, so companies with losing money have withdrawn from the industry.
In the long -term balance, no manufacturer will lose money.
I, long -term equilibrium is to achieve normal profits, but economic profits (also known as excess profits) are 0. Division of normal profits and excess profits: To produce production, the value of all the information and the personal value of the company itself is a cost. After production, it can only make up for the income of this part of value, which is a normal profit. That is to reach the income that does not make money. The value obtained through production exceeds this part is excessive profits, that is, economic profits. If only normal profits are obtained, it is to make up for the original material value and the value of workers, but entrepreneurs do not have other gains, which is equivalent to a busy life. Operation is a profitable activity.
, why the economic profit is 0: Long -term equilibrium conditions are: LAR = LAC's long -term average income is equal to long -term average costs, so do not make money or not. So the economic profit is 0. Manufacturers who fully compete in the market enter or exit a industry with profits. It is the adjustment of production factors between various industries. Production factors will always flow to industries that can obtain more profits. It is this adjustment that makes the profit when the long -term balance of competitive manufacturers is zero.
not doing money without making money, but under the condition of complete competition, the production factor flows freely, and manufacturers freely enter and exit the industry. When a industry profit is profitable, some manufacturers will enter. Increased quantity, the supply of products on the market increases, the market price has gradually declined, and the profit of a single manufacturer will gradually decrease until zero, and no manufacturers will enter. Conversely, when a manufacturer of a industry is losing money, then the manufacturer will withdraw from the industry. The supply of goods will be reduced, the market price will increase, and the loss will be reduced until zero.
three, complete competition, also known as pure competition, is a market structure that is not hindered and interfered, refers to the markets that do not exist in companies or consumers that affect prices. It is the ideal market competition state in economics, and it is also one of the typical market forms. It can be proved that the result of complete competition is in line with Pareto. Complete competition is such a market structure. There are many sellers in homogeneous products. No seller or buyer can control the price, it is easy to enter, and resources can shift from one user to another at any time. For example, many agricultural products markets can be regarded as infinitely similar to the complete competitive market, but it is not the same, because the complete competitive market is ideal.
(2) In the long run, all production factors inputs are variable. Completely competitive enterprises can achieve a balanced condition MR = LMC that maximize profit through adjustment of all production factors input. Under the conditions given to the market price of complete competition, the adjustment of all production factors in long -term production can be manifested as two aspects. On the one hand, it shows the choice of the optimal production scale. Decisions of an industry.
Theoretically, no manufacturer in the industry will lose money when long -term equilibrium, so companies with losing money have withdrawn from the industry.