Why is a firm in a perfectly competitive market called a price taker? How does a firm in perfect competition decide its profit maximizing price and quantity? Explain

Q: Can a perfectly competitive firm set its own market price?

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

Q: If firms in a competitive industry incur an economic profit, what happens to supply, price, output,…

A: Economic profit is defined as difference between revenue that is received from the sale of a good or…

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: How is it possible for perfectly competitive firms to maximize profit in the short run versus in the…

A: Perfect competition: Under the perfect competition market, the price is decided by the demand and…

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: How would you describe the demand curve for the purely competitive firm? For the industry?

A: Purely competitive firms are characterised by being price takers where decisions are made…

Q: Use the following graph to answer the next question. MC ATC AVC 1.25 1.05 .90 .80 .65 .60 15 20 35…

A: Given: Market price = $1.25 Output produced at this price = 20 units  ATC corresponding to this…

Q: graph shows the short run cot curve of a firm in a purely competitive market. Which of the following…

A: The profit maximizing output for the firm occurs where the (the upward sloping part of the) marginal…

Q: In the short run if a perfectly competitive firm finds itself operating at a loss, it will

A: To find : For a perfect competitive firm in short run if it find itself operating loss what will…

Q: What are the characteristics of a perfectively competitive market?

A: There are different market structures with different characteristics.

Q: Show and explain how the short run supply curve of the perfectly competitive firm is derived.

A: in a perfectly competitive market there are large number of firms producing similar and identical…

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: Why is a firm in a perfectly competitive market called a price taker? Why do the price, MR and…

A: A perfectly competitive market structure is where many firms function but none of them are large…

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: What is meant by a competitive firm? Explain the difference between a firm’s revenue and its profit.…

A: The firm is an individual unit of the business which produce and sell the product in the market. The…

Q: Suppose the price determined by the market is 4.5. Assume a perfectly competitive industry. Show all…

A: Profit maximising level of output achieved where MR = MC and MC should be rising Q Price TR MR…

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: explain three conditions that characterise a perfectly competitive market

A: To promote the trade of products and services, a marketplace where two or more parties could meet.…

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: 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: an excess profit be earned in perfectly competitive markets in the long run. Explain.

A: Perfect competition refers to the market where there is large number of buyers and sellers who deal…

Q: equilibrium

A: The equilibrium of the perfectly competitive firm from the equilibrium of the industry is different…

Q: Imagine a firm in a perfectly competitive market. The firm is currently making an economic profit.…

A: Perfect competition happens when all organizations sell indistinguishable items, market proportion…

Q: What prevents a perfectly competitive firm from seeking higher profits by increasing the price that…

A: In a perfectly-competitive market, there are theoretically infinite number of frim. Each firm here…

Q: Based on the characteristics of perfectly competitive market explain why firms in this market are…

A: Perfect competition is a type of market structure in which there are large number of buyers and…

Q: If a firm makes zero economic profit, it will exit the market in the long run. Do you agree?…

A: No economic profit is also referred as normal profit. Economic profit is calculated by subtracting…

Q: Why are firms called price takers in a perfectly competitive market? Why do different firms produce…

A: A perfectly competitive firm is known as a price taker, because the pressure of competing firms…

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

A: Perfect competition: Perfect competition is a market structure where exists a large number of…

Q: Explain whether a perfectly competitive market is more efficient for buyers to buy or sellers to…

A: When perfectly competitive markets combine with utility-maximizing buyers, the resulting quantity of…

Q: What is the main feature of a perfect competitive market.

A: Perfect competitive market The term "perfectly competitive market" refers to a scenario in which a…

Q: Explain what the long run profit conditions are for a perfectly competitive market

A: Perfectly Competitive Market is the one where there are large number of buyers and sellers, selling…

Q: Can you think of a product that meets at least most of the criteria required for a perfectly…

A: Perfectly competitive market refers to the market which has been characterized by the presence of…

Q: 140 123.33 90 56.67 Price 100 133.33 -MR MC ATC Demand Quantity

A: Here, the given graph shows the revenue, demand, and cost curves of a firm.

Q: Suppose the book-printing industry is a competitive market, and it begins with a long run…

A: There are two possibilities, since you did not mention if the firm is incurring profit or loss in…

Q: A perfectly competitive firm is making a loss if

A: We have to find a perfectly competitive firm is making a loss.

Q: In a perfectly competitive market ,why does the firm always break even in the long run ? Illustrate…

A: In perfect competition, in the very short run firms experience profits. However, new firms enter…

Q: “That segment of a competitive firm’s marginal-cost curve that lies above its average-variable-cost…

A:

Q: A single firm in a perfectly competitive market is relatively small compared to the rest of the…

A: In the ‘perfect competition(PC)’ all firms sell ‘identical products’ that are homogeneous. Here all…

Q: What is the shape of the demand curve faced by the perfectly competitive firm? Explain your answer…

A: Perfect competition is the type of market structure in which there are many buyers and sellers of a…

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: Consider the graph of a firm in a perfectly competitive market to answer the question below: MC 10…

A: Profit is maximized at a point where MR is equal to MC.

Q: What are the characteristics needed for a perfectly competitive market?

A: In a perfect competitive market, there is a number of buyers and sellers, selling similar products.…

Q: -run equilibrium in a perfectly competitive market, firms earn positive economic profits.   Is…

A: A perfect competition is where there is free market entry for the firms. If the firm earns profits…

Q: A perfectly competitive firm is a) both a "price maker" and a "price taker" b) neither a "price…

A: In a perfectly competitive market there are large number of firms producing similar and identical…