Re:What harm do minimum wages do?
by crdrost on Wednesday August 19, 2020 @07:55PM
(#24218306)
This this this, so much this.
The economic definition is for a “perfectly competitive market,” one with extremely low barriers to entry. And one of the arguments about these markets is that they are the least profitable markets because firms in a less-profitable market will want to jump the extremely low barriers to switch into that market; this dilutes per-firm profits in the competitive market and concentrates them in the less-competitive market.
Economists consider those least-profits an “opportunity cost” of spending your time in the first place, and if you include that as an explicit cost then the “profit” is indeed zero.
The economic definition is for a “perfectly competitive market,” one with extremely low barriers to entry. And one of the arguments about these markets is that they are the least profitable markets because firms in a less-profitable market will want to jump the extremely low barriers to switch into that market; this dilutes per-firm profits in the competitive market and concentrates them in the less-competitive market.
Economists consider those least-profits an “opportunity cost” of spending your time in the first place, and if you include that as an explicit cost then the “profit” is indeed zero.