Q: What are the two essential characteristics of a competitive market?
A: ANS A competitive market is a market in which there exist many sellers selling homogeneous goods to…
Q: What does the demand curve for a perfectly competitive individual seller look like? Explain the…
A: Perfect competition is one of the types of market structures.
Q: Consider the market for wheat which is a perfectly competitive market. Is the market demand curve…
A: The term "perfect competition" refers to an ideal market arrangement. In a perfect competition…
Q: What is the Imperfect competition that refers to any form of market structure other than perfect…
A: Perfect competition refers to a market in which there is many seller and buyer dealing in a…
Q: How does a competitive firm determine the quantity that maximizes profit?
A: The markets are considered to be of utmost importance for the economies, because it assists in the…
Q: Why will losses for firms in a perfectly competitive industry tend to vanish in the long run?
A: A perfectly-competitive(PC) market is one where there are infinite number of buyers & sellers…
Q: Identify the defining characteristics of a competitive market.
A: Perfect or pure competition is a form of market in which a large number of perfectly informed buyers…
Q: • Please explain the difference between the short run and long run equilibrium under a per- fectly…
A: Perfect competition is the market structure which is characterized by a large number of firms with…
Q: Imagine that you set up your own business. Assume that your firm produces a single product. Please…
A: Perfectly competitive market: It is the market where large number of buyers and sellers dealing in a…
Q: Why are perfectly competitive markets considered economically efficient?
A: There are several forms of the market that exists in the real world out of which perfect competition…
Q: What is the equilibrium or profit-maximizing quantity of production for a perfectly competitive…
A: Prefect competitive market is:- 1) in perfect competitive market, there are many number of sellers…
Q: What are the characteristics of a perfectively competitive market?
A: There are different market structures with different characteristics.
Q: In the long-run, a perfectly competitive firm will earn what kind of economic profit?
A: In the long run, a perfectly competitive firm will earn normal/zero economic profit.
Q: Use the following demand-and-cost information vis-à-vis three firms: Firm A, Firm B, and Firm C…
A: a) From the given table we can understand that Firm C operates in a perfectly competitive market.…
Q: If new technology in a perfectly competitive market brings about a substantial reduction in costs of…
A: The term "perfect competition" refers to a fictional market structure in which all suppliers are…
Q: What happens when a perfectly competitive market is in equilibrium?
A: A perfectly competitive market is a market structure in which there are many buyers and sellers. The…
Q: When will a firm neither enter or exit a competitive market?
A: In competitive market firms are free to enter and exit.
Q: In a perfectly competitive market, how do we go from a short run equilibrium to a long run…
A: A perfect competitive market is one there many firms offer homogenous product to a large group of…
Q: An example of a perfectly competitive industry is: A. cell phone service B. the automobile industry…
A: In a perfectly competitive market, there are many buyers and sellers. Firms do not have any control…
Q: Explain how economics make profit or loss when firms are perfectly competitive.
A: In a competitive market there are large number of firms producing similar and identical products…
Q: What are the Characteristics of a Purely Competitive Market?
A: Characteristics of a Purely Competitive Market: The Purely competitive market is the market…
Q: Is the perfectly competitive market model realistic? If not, why do we want to study the perfectly…
A: Perfect competition is a market model that assumes a large number of firms produce identical goods…
Q: Explain why economic profits in all perfectly competitive markets will tend toward zero in the long…
A: A perfectly competitive market is a market consist of large number of buyers and sellers, selling…
Q: Which of the following is true for a perfectly competitive industry?
A: option 3 is rhe correct answer The firm in industry produce standardized products It's dentical…
Q: equilibrium
A: The equilibrium of the perfectly competitive firm from the equilibrium of the industry is different…
Q: Assume that Sherry's Earrings is producing in a perfectly competitive market and the market price…
A:
Q: of the following, what is the best example of a perfectly competitive market? Select the best…
A: Competition is a feeling of rivalry that takes place between the firms.
Q: List the requirements for a perfectly competitive goods market.
A: For a particular production process, there has to be some factors of production available. For…
Q: What are the conditions that distinguish perfect competition from other market structures?
A: In case of Perfect Competition there are large number of buyers and sellers selling identical…
Q: When is it the right time when a firm will enter a competitive market?
A: A competitive market is considered as one where firms have no opportunity to deviate from market…
Q: Which of the following is most likely to operate under a perfectly competitive market? 1) A…
A: Perfect competition is a market condition there is a large number of buyers and sellers selling an…
Q: What are the unique characteristics of a perfectly competitive market structure compared to the…
A: Perfect competition refers to the situation where there are many buyers and sellers exist in the…
Q: List and explain the importance of each of the five characteristics of purely competitive markets.
A: It is a market circumstance where there is an enormous number of seller of an item which can't be…
Q: Analyze the likely effects of a perfectly competitive market on price, quality, and innovation of…
A: A perfectly competitive market is the one with high degree of competition as many sellers offer…
Q: Explain how the profit-maximizing rule of setting P = MC leads a perfectly competitive market to be…
A: In a perfectly competitive market, there are large number of buyers and sellers in the market…
Q: What is the short run Supply Curve for a competitive firm?
A: In perfect competition, the short-run supply curve is the marginal cost curve (MC) at and below the…
Q: Which of the following is the best example of a perfectly competitive industry? O wheat production O…
A: An industry is perfectly competitive if there are large number of firms selling identical goods with…
Q: Which of the following is true in the long run equilibrium of a perfectly competitive market? O…
A: In the long run equilibrium in perfectly competitive market, firms earn an economic profit of zero.
Q: Evaluate and explain the following statement: The market system is a profit-and-loss system.
A: ‘Market’ refers to a place where goods are bought & sold. The goods are bought & sold at…
Q: Can you name five examples of perfectly competitive markets? Why or why not?
A: Perfect competitive market is a market with large number of buyers and sellers exists and firms are…
Q: In the long run, a perfectly competitive firm can
A: The ideal kind of market structure is known as "perfect competition," and it occurs when all…
Q: perfectly competitive market?
A: Perfectly competitive market is the ideal market where buyers and sellers all have perfect complete…
Q: What is special about a purely competitive market?
A: A perfectly competitive market is the market in which there is perfect competition amongst buyers…
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- The production of plastic bags characterized by high fixed costs and low marginal costs. As a result, we would expect (relatively) O Few small firms in this market O Many large firms in this market O Many small firms in this market O Few large firms in this marketProductive efficiency and allocative efficiency are two concepts achieved in the long mm in a perfectly competitive market. These are the two reasons why we call them perfect. How would you use these two concepts to analyze other market structures and label them imperfect?Suppose that each firm in a competitive industry has the following costs: Total cost: TC = 50 + q2 Marginal cost: MC = q where q is an individual firms quantity produced. The market demand curve for this product is Demand:QD = 120 P where P is the price and Q is the total quantity of the good. Currently, there are 9 firms in the market. a. What is each firms fixed cost? What is its variable cost? Give the equation for average total cost. b. Graph average-total-cost curve and the marginal-cost curve for q from 5 to 15. At what quantity is average-total-cost curve at its minimum? What is marginal cost and average total cost at that quantity? c Give the equation for each firms supply curve. d. Give the equation for the market supply curve for the short run in which the number of firms is fixed. e. What is the equilibrium price and quantity for this market in the short run? f. In this equilibrium, how much does each firm produce? Calculate each firms profit or loss. Is there incentive for firms to enter or exit? g. In the long run with free entry and exit, what is the equilibrium price and quantity in this market? h. In this long-run equilibrium, how much does each firm produce? How many firms are in the market?
- A9 The characteristics of a "perfectly competitive" market require that there is 1) a large number of firms, 2) producing products that are identical across firms, 3) in an industry where there are no barriers to entry. It's unlikely that any industry accurately reflects these extreme assumptions, but what industries can you think of that do display these characteristics at least to some extent? Try to identify the limits of your example in reflecting "perfect" competition.26.A firm operates in a perfectly competitive market and is producing at the profit-maximizing output. It is incurring economic losses. Based on this information, which of the following is true? A-Average total cost = price; marginal cost > marginal revenue. B-Average total cost = price; marginal cost = marginal revenue C-Average total cost > price; marginal cost = marginal revenue D-Average total cost > price; marginal cost > marginal revenue E-Average total cost < price; marginal cost > marginal revenue 27.In the short run, a price-taking firm decides to produce zero units of output. Which of the following must have been the case? A-The market price was less than the firm's average variable cost. B-The firm was earning normal profits in the short run but projected economic losses in the long run. C-The firm's average total cost was higher than its average revenue. D-The market price was between the firm's average variable cost and average total cost. E-The…(1) Consider the following cost schedule for a firm. Quantity Marginal Cost Average Total Cost Average Variable Cost 10 $12 $32 $24 15 $14 $30 $20 20 $16 $28 $16 25 $26 $26 $20 30 $30 $28 $24 35 $40 $32 $30 What is the economic profit or loss for a perfectly competitive firm if the market price is $26? A-0. B- $20. C- negative $20. D-$150. E-negative $150 (2) At what price level would a firm's short-run supply curve begin? A-The price at the minimum of the average variable cost curve B-The price at the profit-maximizing point of production C-The price at the intersection of the average total cost curve and the marginal cost curve D-The price at which demand changes from its elastic to inelastic range E-The price at which marginal cost equals marginal revenue
- Question 3 The current market price in a competitive industry is $15. Every firm in the industry operates a technology that implies costs described by the function C = 12.5 + 0.3Q2. In the future, the technology is expected to change, and the new cost function will then be C = 10 + 0.2Q2. How much profit is the typical firm making today and in the long run? O. Profit is zero both today and in the long run. O. Profit is 125 both today and in the long run. O. Profit is 175 today and zero in the long run. O. Profit is 250 today and 125 in the long run.5 10. In a perfectly competitive market if the quantity produced by a firm is less than the optimal amount then marginal cost is greater than marginal revenue. marginal cost and marginal revenue are undefined. marginal cost equals marginal revenue. marginal cost is less than marginal revenue.Explain whether the statement is valid on not. There are perfect knowledge among the buyers and sellers in a perfectly competitive market
- . In a perfectly competitive market there is a donut shop that sells 1,200 donuts daily. Each donut sells for the market price of $0.75 and they sell out every day. Assume that this company has labor costs of $275 and materials costs of $400. a. Using only variable costs, what is the donut shop’s daily profit? - Now assume that the owner is thinking of adding a second location downtown. The capital investment required is $4,000 (Sunk Cost). The $4000 is Sunk Cost. The normal rate of return is 5%. b. If the new shop could operate under the same conditions as the original location is it a good business decision to expand? c. What would be the new shop’s daily profit?Question 5 Let's suppose that a perfectly competitive firm has the following revenue and cost data. How many products should the firm produce in order to maximize its profits? You can assume that the firm's price is greater than its average variable cost. Quantity Marginal Revenue Marginal Cost 40 $4 $7.70 41 $4 $5.10 42 $4 $3.30 43 $4 $2.10 44 $4 $2.50 45 $4 $3.70 46 $4 $4.10 47 $4 $5.20 48 $4 $10 Question 6 What is the profit maximizing (or loss minimizing) rule for a firm in perfect competition? Be sure to list all of the conditions.Suppose you are a perfectly competitive firm producing computer memory chips. Your production capacity is 1000 units pe r year. Your marginal cost is P10 per chip up to capacity. You have a fixed cost of P10,000 if production is positive and P0 if you shut down. What are your profit-maximizing levels of production and profit if the market price is (A) P5 per chip, (B), P15 per chip, and (C) P25 per chip? For case (B), explain why production is positive even though profits are negative.
