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Why do firms enter an industry when they know that in the long run economic profit will be zero?
Firms enter an industry while they suppose to earn economic profit. These short-run profits are sufficient to encourage entry. Zero economic profits in the long run involve normal returns to the factors of production, as well as the labor and capital of the owners of firms. For instance, the owner of a small business might experience positive accounting profits before the foregone wages from running the business are subtracted from these profits. If the revenue minus another costs is just equivalent to what could be earned elsewhere after that the owner is indifferent to staying in business or exiting.
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Assume that an investor invests $X in a 3-year zero coupon Treasury security. Three years from now, the total return received would be:
What is in store for banking consolidation? A: Merger activity is a natural procedure by which companies make themselves more effective and better able to compete for customers
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