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- Explain whether the statement is valid on not. There are perfect knowledge among the buyers and sellers in a perfectly competitive market[TRUE / FALSE] Please explain In the real-world, marginal cost curve is usually U-shaped.Therefore, in a perfectly competitive market, a firm can maximize profit at two different output levels in the short-runE3 Consider a perfectly competitive firm in a short run scenario. Its total cost function is TC(q)= 4q^2 + 8. The market demand function is Q(p) = 800 - 15p, and there are 40 identical firms in the market. A. What is a firm's short-run supply function? Will it ever decide to shut down? Explain. And what is the market supply function? B. Suppose there are 40 identical firms in the market. What is the equilibrium price, p*? What is the equilibrium quantity supplied by each firm, q*? What is each firm's equilibrium profit? Will there be more entry into the market? Why? C. Repeat b, but with 80 firms this time. Label your results with superscript ** D. Repeat part b, but with 280 identical firms now. Label your results by superscript ***. Part E. Compare your results in parts b - d. Explain why the increase in the number of firms affects the results in that manner. What should happen to profit eventually as the number of firms keeps increasing? And when this happens to profit,…
- Canadian red wheat is a normal good, in a perfectly competitive market that is in long-run equilibrium. There occurs a boom in the economy—incomes rise. What effect does this have on short-run equilibrium? Explain concisely the step-by-step process by which the industry returns to long-run equilibrium. Your answer should include the effects on the individual firm's output and profit, as well as any industry-wide adjustments that take place. Show graphically the relationship between the firm and the industry.A perfectly competitive market is in a long-run equilibrium. Prices of variable inputs for the typical firm decrease. Describe what will happen in the short run, to the typical firm’s marginal costs, average fixed costs, average costs, profits, and production as the firm makes its choices. In each case, describe why those changes take place. Describe exactly why the firm decides to make changes. As part of that discussion, summarize what happens in the market and how those changes relate to the typical firm. You do not need to discuss why the changes take place in the market. Outline in several sentences what will happen in the long run to the typical firm and the market.Draw a diagram for a perfectly competitive industry with firms earning normalprofits in the long run. Assume that all firms in the industry use oil as key inputs.Using an appropriate diagram, illustrate an increase in the price of inputs. Will firmlevel profits increase or decrease and will market supply increase or decrease?
- How does an increase in market demand for a product in a perfectly competitive market affectthe short-run and long-run equilibrium? Show on a diagram and discuss the adjustments firms make in terms of price and quantity to reach the new equilibrium. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.Consider a perfectly competitive world, the demand and supply are given by Qd = 20 – 3*P and Qs = 4*P. If the price is $10 How much is the excess supply or the excess demand?A perfectly competitive market has a demand curve given by the equation Q = 2000 − 2p where Q is the market quantity demanded and P the price per unit. Each firm in the market has the total cost given by TC = 1000 + 100q + 10q' and the marginal cost MC = 100 + 20q If the current market price is $400, 1. Calculate the market quantity , profit and quantity maximizing profit for each firm and Graph your results. OK 2. Suppose that the market is in the long run.How much profit will each firm earn and what will be the market price and What is the market quantity and price ? 3 How many firms operate in this market
- Consider the perfectly competitive market for tofu. Tofu production requires special inspections because of potential allergic reactions in consumers. Starting from long-run equilibrium, show graphically what happens in the short and long run to q. Q, P, and it in the market for tofu (in comparison to the starting point) if the US government decides to impose less stringent inspection requirements before any production can actually start.The following table gives information about a firm’s short-run cost function in a perfectly competitive industry – candy manufacturing. a) What quantity will the firm supply when price of candy is $2? When price is $5? When price is $8? b) Consider the case where price = $2. Suppose that you have been renting capital (a candy-making machine) for a long time under a long-run capital rental agreement, but now the rental contract is about to expire. Should you renew your capital rental contract or not? Explain why or why not. How would your answer change if price is $5? How would your answer change if price is $8? Quantity Total Cost Average Variable Cost Average Total Cost Marginal Cost 0 10 1 15 5 15 5 2 17 3.5 8.5 2 3 18 2.66667 6 1 4 20 2.5 5 2 5 25 3 5 5 6 33 3.83333 5.5 8ASAP Does the state of mr=mc in a perfect competitive market mean that the firm is supposed to sell out no matter how much marginal cost they put? Because mr=mc occurs only if the product sells out 100% corresponing to the put marginal cost, right? I also know that the state is occured because the price in a competitive market is fixed, but i wondered if the state means also selling out completely.
