Show graphically and explain what happens in competitive firm and in market in short and long run if: (a) Consumers' income increases. (b) Consumers' income decreases.
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Show graphically and explain what happens in competitive firm and in market in short and long run if:
(a) Consumers' income increases.
(b) Consumers' income decreases.
Step by step
Solved in 6 steps with 4 images
- Show the competitive firm in long run equilibrium and describe productive and allocative efficiency. Demonstrate what happens to equilibrium price and quantity with an increase in market demand. Can the firm make economic profit in the short run? What about the long run?Show all the work clear handwriting Suppose the market price of a good is $20 and TC=0.5Q2. A. What Q should a profit maximizing perfectly competitive firm choose? B. What are profits? C. Draw a graph that shows the short run choice of Q, revenue and profits.Soft drink industry has been historically profitable why? compare the economies of the concentrate business to the economics of the bottling business. Why do you think the profitability is so different between these businesses?
- I am learning about pure competition in short and long run in intro to microeconomics. How would a pizzeria in a densely populated area with 20 to 50 competitors thrive in a pure short competition market compared to a long-run competition?Explain the concept of a perfectly competitive market and its characteristics.A requirement for a perfectly competitive market is that the sellers sell identical products (consumers don't care who makes the products sold in that market). Think about this from the perspective of the seller. What are the benefits of this? What are the drawbacks? Address these questions in your discussion thread post. You can use a specific product (e.g., bushels of corn) in you discussion if you wish or you can write about generalities.
- a. In a two-panel diagram, graphically illustrate a perfect competitive market and firm showing the firm earning economic profit in the short run. Use AR, MR, MC, and ATC to identify the profit-maximizing output, as well as the amount of profit earned. b. Illustrate and explain how this market and firm move to the long-runAssume that the market for onions is competitive/perfectly competitive market. Further assume that this market is in a long run equilibrium with an equilibrium price of$3for a bag of onions. Ollie's House on Onions is a firm in the market for onions. Ollie's sells 200 bags of onions each week. 1. Using the model of a competitive/perfectly competitive market show what are Ollie's MC, ATC, MR, total revenue. total cost, and economic profit? Show all of this on a graph (see instructions below). 2. Assume that the demand for onions increases and the price per bag of onions goes to$5. Also assume that Ollie's ATC rises to$3.50a bag as he maximizes profit by selling 400 bags a week. What are Ollie's total revenue, total costs and economic profit? Show all of this on a graph (see instructions below). Note: The graphs for each question can be created manually (drawn by hand on paper) or using any software that I can read, scanned and submitted along with this assignment as an uploaded file.…What are some characteristics of perfect competition? Is the Banana market a perfect competition? When you are buying bananas, what is your decision making process? Do you have any favorite brand of banana? How can companies in the market compete? Please name some other examples of perfect competition?
- Define Perfect Competition in your own words and what are the characteristics of a Perfect Competition.Explain how the long run differs from the short run in pure competition.a) How does imperfect competition differ from perfect competition? b) True or False and explain: If a firm in imperfect competition makes economic profit in the short run they can sustain it in the long run. c) True or False and explain: In imperfect competition all firms charge the same price.