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> you're missing the part where corporate profits are zero in a perfectly competitive market. I'm well aware of what defines a perfectly competitive market. >
by morgante 11y ago
> you're missing the part where corporate profits are zero in a perfectly competitive market.
I'm well aware of what defines a perfectly competitive market.
> If corporations always operate at revenues=expenditure
That's not what zero economic profit means. Taxes can also come out of the owner's opportunity costs if the have low elasticity of supply.
- jessriedel 11y ago> I'm well aware of what defines a perfectly competitive market. Then you should have addressed that point in your first reply to randyrand. It was the entire point of his comment. > That's not what zero economic profit means. If you're just talking about the difference between economic profit and accounting profit, I'm well aware of the difference. My point stands. > Taxes can also come out of the owner's opportunity costs if the have low elasticity of supply. Not in the long, as I qualified. In the long run, the only thing owners of capital bring to the table is pure capital itself, and they will simply redistribute capital to the next most profitable venture, which in a large economy is essentially identical.