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- Regulated firms Select one: Have less incentive than competitive firms to reduce costs All of the answers are correct None of the answers are correct Ten to be X-inefficient Are confined to a normal profitMonopoly is characterized by unique products. market entry and exit are difficult or impossible. non-price competition not necessary. All of theseA competitive firm's cost of producing q units of output is TC=18+4q+q^2 Its corresponding marginal cost is MC=4+2q The firm faces a market price p = $24. Create a spreadsheet with q = 0, 1, 2, …, 15, where the columns are q, TR, TC, TVC, AVC, MC, and profit. Determine the profit-maximizing output for the firm and the corresponding profit. Should the firm produce this level of output or should it shut down? Explain briefly. Suppose the competitive price declines to p = $12. Repeat the calculations of part a. Should the firm shut down?
- Identify which options are usually incorrect for a company that has some degree of market power. a.the company can raise its price without sacrificing all of its sales b.the company produces where its elasticity of demand is equal to 1 c.the company's individual demand curve slopes downward d.the company's marginal revenue from its last unit sold is less than the price it charges e.all of the above are trueA perfect competitor is considered as which of the following? Price taker Price maker Dominant firm Firm receiving government micro-economic financing helpSuppose you observe that a particular business has earned positive profits over time and maintained a large share of the market. Which of the following is likely to be true? Group of answer choices Demand for the product is probably elastic The business must be engaging in price discrimination There is probably a barrier to entry preventing new firms from competing Supply must be inelastic Government intervention in this market is probably limited
- There are 15 barbershops in a specific geographic region that all compete for clients and employees. Most of these businesses periodically conduct salary surveys. Most businesses want to be market leaders on pay, thinking that they can attract and retain staff if they pay more than the competitor. What is the likely impact on rates of pay for local barbers in the region? Discriminatory practices may dominate the industry. Stereotyping will occur. Pay rates will decrease over time. Pay rates will increase over time.There are 38 nearly identical ABC stores within a one-mile radius in Waikiki. The combined size of these 38 stores allows ABC to offer large quantities at favorable prices. a. ABC gained market power through a.economies of scale b.government protection c.control of an important input . b. ABC’s market power a.does b.does not guarantee that the firm makes an economic profit.Restrictive practices are characterized as... Group of answer choices Practices that prevent firms from entering certain markets. Practices that restrict the number of consumers who may purchase a product Practices that promote competition by restricting monopolies Practices the reduce competition without outright agreements to raise price or reduce quantity
- 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.In general, supply and demand are often inelastic in the short run, so that shifts in either demand or supply can cause: Group of answer choices A monopoly situation in all cases No change in prices A relatively greater change in prices A relatively smaller change in pricesMaximizing total revenue is the same as maximizing profit is this true or false