In an economy where the output per worker remains constant, a firm successfully increases its market power, allowing it to claim a larger share of its revenue as profit. What is the direct consequence for the real profit per worker?
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Calculating Firm Profit in a Simplified Economy
In an economy where the output per worker remains constant, a firm successfully increases its market power, allowing it to claim a larger share of its revenue as profit. What is the direct consequence for the real profit per worker?
True or False: In an economy, if firms' average profit share of revenue increases, the economy-wide real profit per worker must also increase.
Strategies for Increasing Firm Profitability