Re: compitive markets

Posted by lovekesh on Apr 05, 2012; 12:35pm
URL: http://discussion-forum.276.s1.nabble.com/compitive-markets-tp7438272p7439776.html

20000 profit only make sense to me when i treat firm 1 as a type of industry. For example, making soup out of seaweed and for firm 2 as making herbal medicines. These are two independent industries. If there's more profit in soup industry, more entrepreneurs would join in and would compete. So, firm 1 accounting profit would be reduced to 20000. Similarly for others in firm 2.