Define perfect competition. Does a firm under perfect competition always make supernormal profit? Explain your answer with appropriate diagrams.

Q: Explain how economies of scale keep new firms from entering an industry in which firms are earning…

A: Economies of scale refer to that part of long-run average cost whereby producing more and more units…

Q: what is difference between perfect and pure competition? Highlight the assumptions of perfect…

A: Pure Competition is a subpart of perfect competition Pure competition is a market situation where…

Q: Explain briefly why a firm under perfect competition is a price taker not a price maker?

A: A market is the collection of buyers and sellers. There are different forms of markets based on…

Q: What is the Imperfect competition that refers to any form of market structure other than perfect…

A: Perfect competition refers to a market in which there is many seller and buyer dealing in a…

Q: Why will profits for firms in a perfectly competitive industry tend to vanish in the long run? Would…

A: A market will be perfectly competitive when a larger group of suppliers serve identical or…

Q: Under the assumption of perfect competition in short run firms only earn abnormal profit.…

A: Perfect competition is the market structure with large number of buyers and sellers, selling…

Q: normal profit

A: There are different market structures like: ‘Perfect Competition’, ‘Monopoly’, ‘Monopolistic…

Q: What type of economic profit can most firms expect to make in the long run? Explain your answer.

A: A market is a place where buying and selling of goods and services takes place.

Q: What are the assumptions of perfect competition?  What are the prospects for profitability in the…

A: The perfect competition is a theoretical market structure, which follows some assumptions. In this…

Q: was the west fraser timber company always been classified as perfectly competitive market in the…

A: When talking about the competitiveness of a firm, it can be said that it is determined by the market…

Q: In perfect competition, firms set price equal to marginal cost. Why can’t firms do this when there…

A: In the perfectly competitive market, firms are the price takers as they produce identical product…

Q: Which statement about economic profit is FALSE? All firms are guaranteed to earn economic profit.…

A: Economic profit is the difference between total revenue earned and cost incurred in order to produce…

Q: Under perfect competition, firms profit in the long run will be:- (1) normal profit (2) abnormal…

A: # Perfect competition is a market structure where large number of buyers and sellers are there.  The…

Q: is walmart an example of perfect competition ? Discuss the product they sell, entry and exit to the…

A: Wal-Mart is not the best example of perfect competition. As it can be configured as an oligopoly.…

Q: What are the major characteristics of a firm competing under conditions of perfect competition?

A: The perfect competition is a market structure which is characterized by the presence of a large…

Q: Why does a purely competitive firm not charge price above the market price?  Why does it not charge…

A: In a perfect competition market structure, there exist a large number of buyers and a large number…

Q: der perfect competition, firms profit in the long run will be abnormal profits.

A: A firm's profit is maximized profits in a perfectly competitive market Where marginal revenue (MR)…

Q: What are the three short-run outcomes in the perfect competition? When a firm takes the shut-down…

A: In a perfectly competitive market there are large number of firms producing similar and identical…

Q: Which of the following is NOT a characteristic of perfect competition?

A: To find: Which of the following is NOT a characteristic of perfect competition?

Q: The demand curve for a perfectly competitive firm is a) always greater than its marginal revenue…

A: Perfect competition is a business system where a homogeneous commodity is sold by several companies.…

Q: The basic model of pure competition reviewed in this chapter finds that in the long run all firms in…

A: The pure competition indicates that the market is perfectly competitive. The main features of the…

Q: What is the shape of the demand curve of a firm under perfect competition

A: # A firm under perfect Competition is a price taker. This is because due to large number of firm's…

Q: Which of the following is not necessarily a characteristic of perfect competition? low pricesa large…

A: The implications of perfect competition are as follows: (i) The price is determined by the forces of…

Q: Discuss the long-run benefits of running a firm in perfect competition.

A:

Q: When can you say that their is presence of a strong perfect competition?

A: A real life example of perfectly competitive market is the farmers market. There are a large number…

Q: Under Perfect Competition, firms only make normal profit in the long run. Elaborate

A: In the long term, all production components are interchangeable. Free entrance and departure, as…

Q: Why is Perfect Competition an ideal market structure? Please explain

A: In a market, a perfect competition is considered as an ideal market when there is other markets like…

Q: Using an appropriate diagram, explain how a perfectly competition firm achieves profit- maximising…

A: The structure of the market where there exist many firms who sell homogenous goods to many buyers…

Q: A firm under perfect competition is

A: To find : What is firm under perfect competition.

Q: Graphically explain the profit maximization condition of a perfect competitive firm.

A: In the perfectly competitive market, a firm experiences a situation that the average revenue will be…

Q: Give examples, when the conditions of pure and perfect competition are relatively accomplished.

A: Example when conditions of pure and perfect competition would be accomplished is agricultural…

Q: Why does a purely competitive firm not charge price above the market price?

A: In a perfectly competitive market there are large number of numbers of sellers selling homogeneous…

Q: Draw the following cases for perfect competition. Also perform box analysis for profit/loss. P>ATC…

A: A perfectly competitive market is one where there are large number of buyers and sellers. The good…

Q: Why are abnormal profits of a firm difficult to sustain?

A: The abnormal profits under perfectly competitive market are difficult to sustain because of the free…

Q: In the long run, a perfectly competitive firm makes O A) either a positive economic profit or a…

A: Perfectly competitive market is the market in which all firms produce homogeneous product and sell…

Q: Identify a perfectly competitive firm

A: A perfectly Competetive firm is a price taker it means it has to accept the market prevailing price.…

Q: "There are some technologies for which it is impossible to maximize profit in the long run. "…

A: Maximization of profits occur at the point where the marginal revenue and marginal cost are equal.

Q: Explain why in the long run perfect competitive firms can only break even.

A: Perfect competition refers to the market where homogeneous products are produced. An individual firm…

Q: Explain perfect competition in detailed explain profit maximization graphically

A: Perfect competition is a type of market which is characterized by a large number of buyers and…

Q: The marginal revenue curve for a perfectly competitive firm is

A: Marginal revenue is the additional revenue earned through the sale of additional output. A graphical…

Q: In perfect competition, a firm has __________ market power.     A. No     B. High     C. Low…

A: Option (A).