A feature of a perfectly competitive market is firms are price setters. firms facing a perfectly inelastic demand curve. barriers to entry. firms sell identical products.
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Question 11
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- Firms in a perfectly competitive industry maximize profits by: eliminating the competition. producing a higher quality good and setting a price higher than the competition. setting a price equal to the market price. setting a price less than the market price and undercutting the competition.A primary characteristic of a competitive market is that Question 1 options: a) government antitrust laws regulate competition b) producers sell nearly identical products c) firms minimize total costs d) firms have price setting powerThe demand curve faced by a company in a market characterized as perfectly competitive Group of answer choices all of the above shows economies of scale over a large range of output is horizontal shows diseconomies of scale over a large range of output
- A competitive industry is in long run equilibrium. Each firm has C=q^2+4 and MC = 2q. Market demand is Q =160-20p. The price of a substitute in consumption decreases and demand shift Q = 100-20p. After exit has occurred, how many firms n2 will operate in this industry?Question 5 Why does a firm in a competitive industry charge the market price? Group of answer choices If a firm charges less than the market price, it loses potential revenue. If a firm charges more than the market price, it loses all its customers to other firms. The firm can sell as many units of output as it wants to at the market price. All of the above are correct.The wireless data industry, in which firms compete vigorously against one another for customers, is not considered a perfectly competitive industry. You can choose multiple answers Which of the following industry characteristics make the wireless data industry a non-perfectly competitive industry? A.For wireless firms, long-run economic profits are possible. B.Substantial barriers to entry prevent new firms from entering the wireless market. C.The market is dominated by a few very large wireless firms. D.Wireless firms provide a homogeneous product.
- Limiting Market Power: Regulation and Anti-Trust Predatory pricing threatens to keep competitors out of the market. It is a price that is so low that it will be profitable for the firm that adopts it only if a rival is driven out of the market. Debate why predatory pricing is an economic inefficiency in a perfectly competitive.Question 5 Profit-maximizing firms enter a competitive market when existing firms in that market have Group of answer choices total revenues that are just above fixed costs. market price between average variable cost and average total cost average total costs that exceed average revenue. average total costs less than market price.The market for bananas is perfectly competitive. Firms in the arket are producing output and each firm is receiving positive economic profits. Which of the following is true? (i) new firms enter the industry, increasing supply, driving profits down to zero. (ii) firms will exit the industry, increasing supply, driving profits down to zero. (iii) firms will exit the industry, decreasing supply, driving profits down to zero. (iv) new firms enter the industry, decreasing supply, driving profits down to zero.
- Which of the following firms would most likely be part of a competitive market? Group of answer choices Tony’s brick oven pizza sells pizza by the slice in Georgetown. Abbot, a pharmaceutical company, is a major developer of insulin monitors. Marcus sells eggs that he collects from his hens to Safeway grocery. Central Gas & Electric, the single supplier or electricity.Consider a perfectly competitive market. The industry demand curve is QD = 7-2P. The industry supply curve is QS = P. Suppose the government introduces a subsidy s=1 per unit sold. Which of the following is wrong? A. Consumers pay less per unit B. Deadweight loss increases C. Producers are paid more per unit D. More quantity is traded in the market E. None of the aboveYou have been selected to talk to a group of people about elasticity. While your audience acknowledge that they are able to calculate elasticity, they do not understand its importance to business and government. Discuss the uses of price elasticity of demand.Perfect competition is a theoretical market structure in which the following criteria are met: All firms sell an identical product. All firms are price takers. Market share has no influence on prices. Describe the factors that drive profits to zero in perfectly competitive markets in the long run. Explain the incentives that drive the market to a long run equilibrium. Why would a firm choose to operate at a loss in the short run? When do firms decide to shut down production in the short run?