Microeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506893
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Chapter 10, Problem 2CQ
To determine
Profit earning under the price-searcher market in the long run.
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Students have asked these similar questions
How would the introduction of legal or technical barrier to entry affect the long-run equilibrium in a market that was perfectly competitive before the introduction of the new barriers to entry?
When the number of competing firms is small in a market, is this market necessarily different from a perfectly competitive market in terms of market power and efficiency?
Develop your in-depth analysis and argument on the basis of relevant economic theory or models.
Also discuss and explain how market power can empirically and practically (from a competition policy point of view) be assessed.
The following graph shows the demand curve for a good and the long run average cost curve for a typical firm in this market.
If the government does not intervene in the market, then
Question 4 options:
there will be many firms in this market, all of whom will take the market price as given and produce where price equals marginal cost
there will only be 1 firm in this market, and they will produce where marginal revenue equals marginal cost
there will only be 1 firm in this market, and they will take the price as given and produce where price equals marginal cost
no firms will enter this market
Chapter 10 Solutions
Microeconomics: Private and Public Choice (MindTap Course List)
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