What is the formula for profit maximization by firm ? Why does this result in the marginal cost curve becoming the same as the supply curve for firms in perfect competition?   what is the difference between the short run and long run ? Why does this difference matter in our discussion of firm behavior?

Q: Determine and explain the profit maximization output of a perfectly competitive firm.

A: Perfect competition is a competition where both buyers and sellers have perfect information about a…

Q: In principle, how do we determine a perfectly competitive firm's profit-maximizing output and…

A: Perfect competition refers to the type of market structure in which there are many buyers and…

Q: Explain briefly why a firm under perfect competition is a price taker not a price maker?

A: A market is the collection of buyers and sellers. There are different forms of markets based on…

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: Why is the marginal revenue of a perfectly competitive firm equal to the market price?

A: Perfectly competitive market: - it is a market condition where there are many buyers and many…

Q: Perfect competition occurs when none of the individual market participants (buyers and sellers) can…

A: A market is the collection of buyers and sellers. Perfect competition is the market form with a…

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: In perfect competition, firms set price equal to marginal cost. Why can’t firms do this when there…

A: In the perfectly competitive market, firms are the price takers as they produce identical product…

Q: must each perfectly competitive firm be in equilibrium if the industry is in the long-run…

A: Perfect competition refers to the situation where there are large number of prouder and consumers…

Q: The demand curve for a perfectly competitive firm is a) always greater than its marginal revenue…

A: Perfect competition is a business system where a homogeneous commodity is sold by several companies.…

Q: If a firm's total revenue is $100, it's total cost is $130, and its total fixed cost is $40. Should…

A: Hi Student, thanks for posting the question. As per the guideline we are providing answers for the…

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 would a firm that incurs losses choose to produce rather than shut down

A: Shut down point refers to the point where the firm stops its production process. It is the point…

Q: In the long run, perfectly competitive firms make zero economic profit. If this is the case, why…

A: When a company's economic profit is zero, it is in a state of normal profit, which is why normal…

Q: What is the shape of the demand curve faced by a firm under perfect competition?

A: Perfect competition, according to economic theory, occurs when all companies sell identical items,…

Q: Why would a profit-maximizing, perfectly competitive form continues to operate for a period of time…

A: A perfect competitive firm who is facing losses in the market will decide to shut down if the price…

Q: The connection between marginal revenue and price depends on a business's competitive environment.…

A: Under perfect competition, there exists a large number of buyers and sellers. Each firm sells…

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: If the price of a product produced by a perfectly competitive firm falls below the average total…

A: Perfect competition refers to the situation where there are many buyers and sellers exist in the…

Q: Explain how market competition affect the mark –up in price setting and the fraction of the marginal…

A: If there is market competition then setting mark-up price will be affected a lot. Let's understand…

Q: Is it true that a firm in a perfectly competitive market will never be able to earn positive…

A: There are different types of market which are broadly grouped as: Perfect competition and Imperfect…

Q: A firm in a perfectly competitive industry is maximizing its profits at 400 units of output. If the…

A: Perfectly competitive industry It refers to a industry in which there are large number of buyers and…

Q: What is the relationship between marginal cost and the short-run supply curve for the purely…

A: Supply curve is the graphical representation of direct relationship between price and quantity…

Q: Explain why a competitive firm’s marginal cost curve is the same as its supply curve.

A: In perfectly competitive market there are many sellers as well as buyers. Price is given that means…

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: The figures show the cost curves and the marginal revenue curve of a Perfectly Competitive firm.…

A: Perfect competition is a market structure in which all producers and customers have complete and…

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: Why is a firm in a perfectly competitive market called a price taker? How does a firm in perfect…

A: Price taker: It means a person or company accepting the prevailing prices in the market and unable…

Q: Why is the marginal revenue of a perfectly competitive firm equal the market price?

A: Marginal revenue: it refers to the additional revenue received from the sale of an additional good.…

Q: In competitive markets economic profit becomes zero in the long-run. However, it is also possible…

A: Accounting profit: Accounting profit is obtained by deducting the total explicit cost from the the…

Q: For a perfectly competitive firm, what is the relationship between Price and Marginal Revenue?

A: For a perfectly competitive firm price is equal to marginal revenue

Q: why does price equal marginal revenue for the perfectly competitive firm? what is the relationship…

A: Perfect competition refers to the type of market organization in which there are many buyers and…

Q: Graphically show how the profit-maximizing level of output is determined for the perfectly…

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

Q: What is the profit maximizing level of output for the firm? b.What is the economic profit earned or…

A: A market is the collection of buyers and sellers in which they exchange goods and services in terms…

Q: Suppose all firms in a perfectly competitive market structure are in long-run equilibrium. Then…

A: Tax refers to the compulsory charges levied by the government on its citizen and the citizen. The…

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: In a perfectly competitive market, please compare the short run and long run prices in an increasing…

A: Perfect competition refers to the market structure where there are a large of number of buyers and…

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

A: In perfectly competitive market, there are large number of firms selling identical goods.

Q: Why is the marginal revenue curve for a perfectly competitive firm the same as its demand curve?

A: Perfect or pure competition is a form of market in which a large number of perfectly informed buyers…

Q: The following diagrams show the market for a good, as well as the cost curves for an individual firm…

A: Equilibrium is achieved at a point where demand curve intersects the supply curve. Breakeven occurs…

Q: Assume the firms in a perfectly competitive market are initially incurring economic losses. An…

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

Q: The marginal revenue curve for a perfectly competitive firm is

A: Marginal revenue is the additional revenue earned through the sale of additional output. A graphical…

Q: What is the meaning of ‘acceptable loss’ for a perfectly competitive firm ?

A:

Q: Explain the three possible profit maximizing positions of perfectly competitive firms in the…

A: The various forms of market structure include perfect competition, oligopoly, monopoly, and…

Q: At the profit-maximizing output level, what will be the relationship between the perfectly…

A: A profit-maximizing output level is when that gives highest returns to the firm as any change in…