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Esther Gomez
on Oct 27, 2024

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Lawn mowing is a perfectly competitive industry.Alex's Lawn-Mowing Service should shut down in the short run whenever his profits are negative.

Perfectly Competitive

A market structure where many firms offer a homogeneous product, there are no barriers to entry or exit, and all firms are price takers.

Short Run

A period in economics during which at least one factor of production is considered fixed, limiting the firm's ability to adjust to changes in market demand.

Profits

The financial gain obtained when the revenues generated from business activities exceed the expenses, costs, and taxes needed to sustain the activity.

  • Analyze how changes in market dynamics influence a company's decisions regarding profitability and production.
  • Assess the immediate and extended period strategies adopted by companies concerning fixed expenses.
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Berenise FloresOct 29, 2024
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