Exhibit 12-9 Refer to Exhibit 12-9.The firm is now able to sell more of its lawn care services at a higher price and as a result will be able to earn economic profits:

Question

Exhibit 12-9  Refer to Exhibit 12-9.The firm is now able to sell more of its lawn care services at a higher price and as a result will be able to earn economic profits:

Quizplus · Accepted Answer

In the short run, the firm can earn economic profits by selling more at a higher price, but in the long run, other firms may enter the market, driving down the price and reducing the economic profits. Perfectly competitive firms can earn zero economic profits in the long run due to free entry and exit, but in the short run, they can earn economic profits or losses. Keeping costs constant is not a determining factor in earning economic profits in the long run or short run.