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Profit serves a very crucial function in a free-enterprise economy, such as our own
Chapter 1, Problem 11(choose chapter or problem)
Profit serves a very crucial function in a free-enterprise economy, such as our own. High profits are the signal that consumers want more of the output of the industry. High profits provide the incentive for firms to expand output and for more firms to enter the industry in the long run. For a firm of above-average efficiency, profits represent the reward for greater efficiency
Questions & Answers
QUESTION:
Profit serves a very crucial function in a free-enterprise economy, such as our own. High profits are the signal that consumers want more of the output of the industry. High profits provide the incentive for firms to expand output and for more firms to enter the industry in the long run. For a firm of above-average efficiency, profits represent the reward for greater efficiency
ANSWER:Problem 11
Profit serves a very crucial function in a free-enterprise economy, such as our own. High profits are the signal that consumers want more of the output of the industry. High profits provide the incentive for firms to expand output and for more firms to enter the industry in the long run. For a firm of above-average efficiency, profits represent the reward for greater efficiency.
Step By Step Solution
Step 1 of 3
The premises are the statements that set forth the reasons or evidence. We label the premises as P1, P2, ...
The conclusion is the statement that is claimed to follow from the premises. We label the conclusion as C.