To maximise profits under any market structure, firms must apply two rules: the shutdown rule and the profit-maximising rule. Explain each of these rules using the marginal revenue/marginal cost approach.
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To maximise profits under any market structure, firms must apply two rules: the shutdown rule and the profit-maximising rule.
Explain each of these rules using the marginal revenue/marginal cost approach.
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- Show a firm that is earning zero economic profits, but has some market power. Then, assume this market power is entirely eliminated when a new competitor enters the market with the same technology and produces a perfect substitute. Showing in your diagram how the firm must adjust its production level to most effectively compete with the new entering firm, explain why maintaining competition is important.In a perfectly competitive market, one of the following answers is correct with respect to the demand curve for a perfectly competitive firm. Which one? Group of answer choices The perceived demand curve is downward sloping. The perceived demand curve for a perfectly competitive firm and a monopolist look the same. When price increases, quantity demanded from the firm will also decrease. The demand curve is flat. Answer correct and explain within 40 mins will give you positive feedback.Which of the following must be present for a firm to maintain its market power for an extended period of time? A. Supply and demand B. Perfect competition C. Barriers to entry D. Profit maximization
- When a competitive price-searcher market is in long-run equilibrium, the firms will earn economic profit. charge a price that is equal to average total cost.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.Does the perfect competition market structure have barriers? If so list specific barriers to entry for the perfect competition market structure.
- Compare and contrast monopoly and perfect competition market structures in the Long-run.In a perfectly competitive market, one of the following answers is correct with respect to the demand curve for a perfectly competitive firm. Which one? Group of answer choices The perceived demand curve is downward sloping. The perceived demand curve for a perfectly competitive firm and a monopolist look the same. When price increases, quantity demanded from the firm will also decrease. The demand curve is flat.Compared to the perfectly competitive industry, a monopoly options: provides a higher quantity. provides exactly the same quantity. charge the same price. provides a lower quantity.
- How would the introduction of legal or technical barrier to entry affect the long-run equilibrium in a market that was perfectly competitive before the introduction of the new barriers to entry?True and False Also correct the false answers: 1. The firm operates in a long-run production period where labor is variable, capital is fixed. (True/False) 2. The main difference between perfect competition and monopolistic competition is the degree of product differentiation. (True/False) 3. Coordination costs arise because of uncertainty and complexity of tasks. (True/False)Employ the production cost theory to explain why we consider the Fruit & VegetableMarketin Al-Aweer to have a perfect competition structure.
