You read in a business magazine that farmers are reaping high profits. With the theory of perfect competition in mind, what do you expect to happen over time (in the long run) to each of the following? The profits of farmers based on what happens to the price, what do you think will happen to the profits earned by the firms/farmers that previously existed in the market?

You read in a business magazine that farmers are reaping high profits. With the theory of perfect competition in mind, what do you expect to happen over time (in the long run) to each of the following? The profits of farmers based on what happens to the price, what do you think will happen to the profits earned by the firms/farmers that previously existed in the market?

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter9: Perfect Competition

Section: Chapter Questions

Problem 8QP

See similar textbooks

Similar questions

You read in a business magazine that farmers are reaping high profits. With the theory of perfect competition in mind, what do you expect to happen over time (in the long run) to each of the following? The number of farms can new firms enter the market? If they can, what will happen to the market supply curve? If they cannot enter, explain.
You read in a business magazine that farmers are reaping high profits. With the theory of perfect competition in mind, what do you expect to happen over time (in the long run) to each of the following?
You read in a business magazine that farmers are reaping high profits. With the theory of perfect competition in mind, what do you expect to happen over time (in the long run) to each of the following? The equilibrium output in agricultural markets based on what happens to the price given the change in supply, what do you think will happen to the equilibrium quantity? Will it remain the same, increase or decrease?
Does perfect competition exist in real life?
Why is perfect competition assumed to be the best market situation in most cases? Draw a graph showing the long run result of perfect competition and explain why it benefits society.
explains why in perfect competition, there are no economic profits or losses in the long run?
What is the Imperfect competition that refers to any form of market structure other than perfect competition?
Write down some examples of industries that are (close to) perfectly competitive. What attributes do they have to be considered perfectly competitive?
explain how the costs of the firm are calculated, and the way that prices are determined in perfect competition
How does a firm in perfect competition decide what price to charge? What quantity to produce? Explain.
Why do you think a firm in a perfectly competitive industry does not have market power?