Do you expect firms in perfectly competitive industries to have high profits in the short run? Why or why not?

Q: In the short-run, if the marginal cost of a firm in a competitive industry is upward sloping while…

A: The short-run is the time period where at least one variable is fixed and others are variable. In…

Q: How is it possible for perfectly competitive firms to maximize profit in the short run versus in the…

A: Perfect competition: Under the perfect competition market, the price is decided by the demand and…

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

A: A perfectly-competitive(PC) market is one where there are infinite number of buyers & sellers…

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: How would you describe the demand curve for the purely competitive firm? For the industry?

A: Purely competitive firms are characterised by being price takers where decisions are made…

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: • Please explain the difference between the short run and long run equilibrium under a per- fectly…

A: Perfect competition is the market structure which is characterized by a large number of firms with…

Q: If you are the manager of a perfectly competitive firm that is making a loss (TR < TC), would you…

A: Any manager worth his salt would aspire to maximize profits and minimize losses.  When the total…

Q: Can you explain to me why in the short run, firms only use variable cost to determine whether or not…

A: Shutdown point is a point of production where a firm decides not to continue production as producing…

Q: At what output does a perfectly competitive firm maximize its profit? when marginal cost equals…

A: A perfectly competitive firm is the one where there are large number of buyers and sellers selling…

Q: When would a seller possibly decide to exit the industry over the long run? What should product…

A:

Q: Do you agree with the following statement and explain why! "A firm that operates in a perfectly…

A: Perfectly competitive market is a market where there are many buyers and sellers in the market…

Q: What is the equilibrium or profit-maximizing quantity of production for a perfectly competitive…

A: Prefect competitive market is:- 1) in perfect competitive market, there are many number of sellers…

Q: Would a perfectly competitive firm produce if price were less than the minimum level of average…

A: No, a perfectly competitive firm would not produce if price were less than the minimum level of…

Q: Why do you think a firm in a perfectly competitive industry does not have market power?

A: The market is a location where the transaction of services and commodities takes place. It is…

Q: Would independent trucking fit the characteristics of a perfectly competitive industry? and why?

A: A perfectly competitive market is where there are many numbers of buyers and sellers, with…

Q: Explain how a firm would maximise its profit, assuming that it faces conditions of perfect…

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

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

A: Perfectly competitive markets are the one's where there are multiple buyers and sellers, products…

Q: Under what conditions should a competitive firm shut down in the short run?

A: In the short term, a corporation that operates at a loss (where the income is less than the overall…

Q: Explain how the perfectly competitive firm decides whether to operate or shut down in the short run.

A: A perfectly competitive firm is a price taker and can sell any quantity of the commodity at the…

Q: If the firms in a competitive industry incur an economic loss, what happens to supply, price,…

A: If firms earn economic loss, some of them will exit the market. This will decrease market supply,…

Q: A profit-maximizing business incurs an economic loss of $$30,000 per year. Its fixed cost is $45,000…

A: Short run business decision: It is given that, it is a profit-optimizing firm that incurs an…

Q: In the short run, a perfectly competitive firm should continue to produce as long as it can cover…

A: In the short run, a perfectly competitive firm should continue production till price per unit is…

Q: Under what conditions will a firm shut down temporarily? Explain.

A: One of the classifications of a firm’s costs is fixed cost (FC) and variable cost(VC). Fixed costs…

Q: Under what conditions will a firm shut down temporarily? Explain theoretically and graphically.

A: Firm would shut down temporarily,if it is not able to cover the fixed cost. For this,price has to be…

Q: The graph shows the cost curves for a perfectly competitive firm. If the market price of the product…

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

Q: Explain why economic profits in all perfectly competitive markets will tend toward zero in the long…

A: A perfectly competitive market is a market consist of large number of buyers and sellers, selling…

Q: equilibrium

A: The equilibrium of the perfectly competitive firm from the equilibrium of the industry is different…

Q: Many firms, especially in perfectly competitive markets, file for bankruptcy every year, yet they…

A: Firms will shut down when their cost exceed revenue and they cannot continue to compete in the…

Q: What prevents a perfectly competitive firm from seeking higher profits by increasing the price that…

A: In a perfectly-competitive market, there are theoretically infinite number of frim. Each firm here…

Q: Firms always lose money in a long-run industry equilibrium, true or false?

A: Firms always lose money in a long-run industry equilibrium, true or false.

Q: The vast majority of industries are probably not perfectly competitive. Why then do you suppose…

A: * ANSWER :-  * Perfect competition is the most straightforward industry structure, and it serves as…

Q: What happens when a competitive industry begins to suffer losses because the demand for its output…

A: Companies can only generate short-term profits or losses in a totally competitive market. Because an…

Q: Perfectly competitive firms will react to profits in the long run by _______ production.

A: The market is a location where the transaction of services and commodities takes place.

Q: What is the most important decision a perfectly competitive firm must make to maximize profit? what…

A: In a perfectly competitive market, there are many buyers and sellers. The good produced is…

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: Refer to the above graph for a purely competitive firm in the short run. What minimum output level…

A: In order to answer this question, it is imperative to understand the concepts of breakeven and…

Q: A perfectly competitive firm is making a loss if

A: We have to find a perfectly competitive firm is making a loss.

Q: Is it even better for perfectly competitive firms to produce output even though it is losing money?…

A: In economic theory, perfect competition occurs when all companies sell the same products, market…

Q: Which of the following is true concerning purely competitive industries?

A: The perfect competition market consists of a large number of sellers who are price takers as the…