Business, 28.06.2020 03:01 izzxizzy

A firm in a purely competitive industry has a typical cost structure. The normal rate of profit in the economy is 5 percent. This firm is earning $5.50 on every $50 invested by its founders. a. What is its percentage rate of return? 11 percent.
b. Is the firm earning an economic profit? Yes If so, how large? 6 percent.
c. Will this industry see entry or exit? Entry
d. What will be the rate of return earned by firms in this industry once the industry reaches long-run equilibrium?

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