Q2. In Pakistan, there are several farmers in various situations, selling identical products to the market, and many buyers. At the market, it is easy to compare prices. Therefore, agricultural markets often get close to Perfect Competition Market; explain it numerically as well as graphically.
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- Suppose two artists are selling paintings for thesame price in adjacent booths at an art fair. By theend of the day, one artist has nearly sold out of herpaintings while the other artist has sold nothing.Which characteristic of competitive markets has notbeen met and best explains this outcome?A6 A functioning market exists when there is more than one firm on either the buying side of the selling side of the market for a particular product.When the holiday season arrives this year, people prefer to buy gifts online. Which graph depicts how the market of parcel delivery services change during this holiday season?
- Miker, a manufacturer of generic medications, is deciding how much to charge retailers for their generic acetaminophen. The marginal cost for each bottle is provided in the accompanying table. If the price of a bottle is $7.75, how many thousand bottles would Miker produce each day? What about if the price is $9.00 per bottle? Use the Rational Rule for Sellers in Competitive Markets to help explain why the values are different. Finally, draw Miker’s individual supply curve. Quantity of acetaminophen (thousand bottles) Marginal cost (per bottle) 1 $6.00 2 $7.00 3 $7.75 4 $8.25 5 $9.00 6 $9.50When the Covid outbreak began, prices of face masks escalated or, in areas where sellers kept prices lower, none could be found on the shelves. For those who received substantially higher prices, let’s assume they reaped significant economic profits. How would theory predict that the market for masks would respond? What market structure best characterizes the market for masks?Name two types of market failure. Explain why eachmay cause market outcomes to be inefficient.
- Sam is a personal trainer working for private clients. He just moved from California to a city on the East Coast and he needs to create his newclient base. A colleague told him that on the East Coast personal trainers face an inverse demand P = 300 – 20Q, that is when working with Qclients, a personal trainer can find one more client willing to pay P = 300 – 20Q for a weekly training session. Sam’s opportunity cost of a twohour training session is MC = 10Q. We make the heroic assumption that clients are infinitely divisible so that we can use calculus to solveSam’s profit maximizing problems.At first, Sam doesn’t read East Coasters that well and he can’t tell who is willing to pay more money for training sessions. Hence, he chargesall clients the same price.a) In part naively in part to get to know more people, Sam decides to sign up any customer willing to pay a price at least as high as his marginalcost of time. That is, Sam behaves like a price-taker. How many clients does he…Assume the Witcher video games only have Nintendo switch versions. CD Projekt Red announces the highly anticipated Witcher 4 game will be released next month. No new Nintendo switches are available for the next 6 months due to covid related supply issues. What will the impact of this announcement be on the market for USED Nintendo switches? Explain by Microeconomics only. (i.e. quantity demand, supply; demand curve)Graphically demonstrate how the following economic events influence (ceteris paribus) the relevantsupplyfunction. Label your axes, and specify the market you are discussing. (a) Strong profits in the market for cyber security attract new firms. (b) Low-cost energy reduces the expense of producing and storing ice cream
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