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A: Answer- Given in the question-
a. Why, in
b. Why is the marginal cost curve shaped the way it is?
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Solved in 2 steps
- Explain the concepts of revenue, costs and profit.Can excess profit be earned in this industry in the long run?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.
- Marginal revenue must exceed marginal cost.Explain why?How do you calculate marginal cost and marginal revenue?Q2. Ramzah owned a burger stands along the beach. Figure 2 shows Ramzah’s cost curves. Figure 2: Market for Burger (a) What is Perfect Competition? (b) If the market price of a burger is $4, what is Ramzah’s profit-maximizing output? (c) Calculate the economic profit that Ramzah’s makes. (d) With no change in demand or technology, how will the price change in the long run? (e) Distinguish between technological efficiency and economic efficiency.
- Can the marginal revenue be negative??? True/FalseWhat does (Box A + Box B) represent for this firm? A Marginal Revenue B Marginal Cost C Average Total Cost D Total Revenue E Total Cost F ProfitWhat 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?
- Small “Mom and Pop" firms sometimes exist even though they do not earn economic profits. How can you explain this? Think about what all is covered in economic profit?Write down some examples of industries that are (close to) perfectly competitive. What attributes do they have to be considered perfectly competitive?Discuss where does the shutdown being and why? What does the company has to do to get back to supernormal profit?
