+1-415-670-9189
info@expertsmind.com
Explain why the presence or lack of profits might exist
Course:- Microeconomics
Reference No.:- EM13700166




Assignment Help
Assignment Help >> Microeconomics

Zelda Industries is the only firm of its kind in the world. Due largely to historical accident, it began producing streganomas in 1985 in a vacant warehouse. Virtually anyone with a degree in college chemistry could easily replicate the firm's formula, which is not patent protected. Nonetheless, since 1985 Zelda has averaged accounting profits of 6 percent on investment. This rate is comparable to the average interest rate that large banks paid on deposits over the period.

a) Do you think Zelda is earning monopoly profits? Why?

b) Explain why the presence or lack of profits might exist.




Put your comment
 
Minimize


Ask Question & Get Answers from Experts
Browse some more (Microeconomics) Materials
Market supply of labor The following table shows the hours per week supplied to a particular market by three individuals at various wage rates. Calculate the total hours per
How does and increase in consumers income affect the demandfor mcds big mac hamburgers? if the demand curve shifts, indicate whether it will shift to the right and draw a gr
Which of the following is NOT an explanation for the revival in the growth of productivity starting in the mid 1990s? A)Cell phones and wireless Internet access increase wor
Identify and recommend strategies to move the company not only to a position of maintaining current levels of quality and sales, but improving in each of these measures of s
What is the break even unit sales volume company should have projected as part of its business plan before entering this market and should reconsider each time it considers
In the Keynesian consumption function: the estimated marginal propensity to consume is , and the average propensity to consume is Using data on annual income and consumptio
Should we distinguish between collusive outcomes and collusive conduct? Why does tacit collusion in the commercial waste hauling business often take the form of exclusive terr
Write down the expressions for how much a consumer at location d would value the products sold by firms A and B, if they set prices Pa and Pb? Based on your expressions in (