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"in a perfect market producers make zero profits" In what world would any company make zero profits in a "perfect" sense? Companies exist to make profit...
by wernercd 7y ago
"in a perfect market producers make zero profits"
In what world would any company make zero profits in a "perfect" sense?
Companies exist to make profit...
- vikramkr 7y agoPerfect here refers to the mathematical model of a perfect market and perfect competition, not an external normative sense of the word as some societal ideal.
- Klinky 7y agoEven in the real world the idea that "companies exist to make profit" sounds wrong. Companies exist to ideally output goods or services, and profit is a tool to ensure they can continue making those goods or services. It can be hard for a company to exist without making a profit, but not the reason they exist.
- savanaly 7y agoYou're thinking of accounting profit, the person you're replying to was thinking of economic profit. https://www.investopedia.com/ask/answers/033015/what-difference-between-economic-profit-and-accounting-profit.asp https://www.investopedia.com/ask/answers/033015/what-differe...