An industry in perfect competition often exhibits the following features: O Many buyers, many sellers, identical products, restricted entry Many buyers, many sellers, identical products, free entry Many buyers, few sellers, non-identical products, free entry O Only one producer and many buyers
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- Perfect competition is a theoretical market structure in which the followingcriteria are met: All firms sell an identical product. All firms are price takers.Market share has no influence on prices. Given the characteristics describedabovei. Describe the factors that drive profits to zero in perfectly competitivemarkets in the long run. Explain carefully the incentives that drive themarket to a long run equilibrium. ii. Why would a firm choose to operate at a loss in the short run? iii. When do firms decide to shut down production in the short run?: Assuming a perfect competition market exists: a) State the profit maximizing condition for each firm in the industry. b) Graphically, show the market equilibrium of the industry and a representative individual firm where economic profits equal zero. Please include marginal revenues, demand curve, price and quantity at the equilibrium. c) From part b above, if the number of consumers increases, show the change in the industry and the individual firm. As results, what do you expect other changes in the industry and the individual firm in a longer term?no chagpt urgent. Which of the following is a barrier to entry in a perfectly competitive industry? a)brand name recognition b)patents or copyrights c)economies of scale d) all of the above are correct e)none of the above is correct
- Perfect competition is great for consumers, but not for producers. Present a perfect competition equilibriumusing the average cost and marginal cost curve framework used in class, and explain using words why thisequilibrium is good for consumers but not for firms. Then, assume the firm innovates in a way that gives thefirm market power and provides the firm with an economic profit. In a second diagram, show the situationfor this firm after the innovation. Use your results to explain using words why free market capitalism tendsto provide an improving living standard for consumers over time.Market Structure Number of Firms Type of Product Sold Price Taker? Price Formula Freedom of Entry? Short-run Profit? Long-run Profit? Industry Examples Perfect Competition Choose an item. A.infinite B.many C.Few dominante firms D.One Choose an item. A.Unique B.differentiated C. Identical D.Differentiated or identical Choose an item. A.yes B. NO Choose an item. A.P=MC B.P>MC C.P<MC Choose an item. A. YES B.NO Choose an item. A.YES B.No Choose an item. A. Yes B. No [Insert two to three example industries that meet the criteria of the market structure.] Monopolistic Competition Choose an item. A. Infinte B.Many C. Few dominant firms D. One Choose an item. A. Unique B.Differentiated C. Identical D.Differentiated or Identical Choose an item. A. Yes B. No Choose an item. A.P=MC B.P>MC C. P<MC Choose an item. A. Yes B NO…Which of the following is a barrier to entry in a perfectly competitive industry? a)brand name recognition b)patents or copyrights c)economies of scale d) all of the above are correct e)none of the above is correct
- Find short run industry supply for 60 firms, in perfect competition. Each with TC = 5q + 15q^2 +20 Find equilibrium if Qd = 25 - 5p Find equilibrium if Qd = 500 - 2pA perfectly competitive industry is composed of 100 identical firms with cost structure: q TC VC FC AVC ATC MC 0 4 1 8 2 10 3 14 4 20 5 28 6 38 b) Assuming that the market price is p = 8, what are the quantity produced by each firm and the profit it makes?Which of the following is not necessarily a characteristic of perfect competition? low pricesa large number of buyers and sellersa homogeneous productperfect information
- How does perfect competition address the problems of Allocative and Productive efficiency? Assume this is a constant or increasing cost industry. Start your analysis from a point of economic profit or loss, your choice. Explain this in no less than 50 words, or less if you employ graphs. In your explanation, define each term, define triple equality, does it matter if this is the short or long run? why? How is Allocative or Productive efficiency achieved, or not? How, if at all, do the existence of externalities alter your analysis?The elimination principle is the idea that profits are eliminated by firms exiting the industry and losses are eliminated by firms entering the industry. true falsePlease no written by hand solutions 9. A firm produces a product in a perfectly competitive industry and has a short-run total cost function of SRTC= 50+ 4q+2q. In the short-run, the market equilibrium price is $20 and the firm's profit maximizing quantity is_ Assuming there is no change in cost structure, in the long-run the equilibrium price changes to a. 4; $24 b. 4:$15 c. 5; $24 d. 5:$15 10. The market for sugar consists of 3,500 identical firms, each with the following short-run total cost function: SRTC-1,500+ 35q. The market demand curve for sugar is Q=11,200- 30P. What is each firm's short-run profit? a. So b. $280 c. -$1,080 d. -$1,360 e. -$1,500