Help please...economics!!?

Question

Evaluate the following statements. Detemrine whether each is true or flase and explain your answer.

a. If economic profits are zero, firms will extit the industry in the long run.

b. A firm cannot maximize profits without minimizing costs.

c. If a firm is minimizing costs, it must be maximizing profits

Answer 1

while i appreciate the first answer's point of view, i believe this question is better answered in an academic point, since people over here asking specific questions like these, are typically students. for that reason, his second answer is wrong. he answered with the opinion of "increasing profits" while in economic terms maximising profits isnt the same as increasing profits.

a. false, economic profits are different from accounting profits. that said, even if this market doesnt give the business economic profits, the firm might still want to continue in that industry because economic profits for other options might be even lower or the same.

b. false. a firm maximises profits by following the profit maximising rules. that is, setting the price at the point where MC = MR, and MR has cut MC from below. also, the P > ATC.

c. false. minimising the cost but setting the price at the wrong level, simply means less sales or more sales but not enough to cover the costs. price setting is more important than minimising the costs, in economic terms.

Answer 2

False. Most start ups take time to generate a profit if the product sells and is popular and or needed sales will increase with knowledge of the product
true reducing costs at any rate increases profit especially with the global economy. competition drives prices down when prices are driven down cost must come down or better said productivity must rise.
False Just because you are minimizing costs does not necessarily mean you are maximizing profits.if you are minimizing costs but are losing quality and adding rework, or customer complaints you are actually decreasing profits.