How is the equilibrium number of firms determined in a market where entry and exist is permitted?
Answers
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Explanation:
Equilibrium no of firms = Equilibrium quantity/ supply of each firm . (i) When income of the consumers increase then demand will also increase.
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Answer:
In a securities industry where free entry and outlet is permitted, the equilibrium number of houses is determined by equilibrium quantity supply per firm.
Explanation:
In a situation of free entry and exit, firms can either earn normal profit or zero economic profit. In that location is no range of earning abnormal profits and losses, because if they earn abnormal profit, then new firms will go into the marketplace. Thereby decreasing the abnormal profits and vice versa.
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