Microeconomics
11th Edition
ISBN: 9781260507140
Author: David C. Colander
Publisher: McGraw Hill Education
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Question
Chapter 13, Problem 8QE
To determine
The impact of technological development when it reduces the marginal cost in the short-run
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If new technology in a perfectly competitive market brings about a substantial reduction in costs of production,how will this affect the market?
What is the equilibrium or profit-maximizing quantity of production for a perfectly competitive firm?
What does zero economic profits in the long-run mean to the owner of a business operating in a perfect competitive market?
Chapter 13 Solutions
Microeconomics
Ch. 13.1 - Prob. 1QCh. 13.1 - Prob. 2QCh. 13.1 - Prob. 3QCh. 13.1 - Prob. 4QCh. 13.1 - Prob. 5QCh. 13.1 - Prob. 6QCh. 13.1 - Prob. 7QCh. 13.1 - Prob. 8QCh. 13.1 - Prob. 9QCh. 13.1 - Prob. 10Q
Ch. 13 - Prob. 1QECh. 13 - Prob. 2QECh. 13 - Prob. 3QECh. 13 - Prob. 4QECh. 13 - Prob. 5QECh. 13 - Prob. 6QECh. 13 - Prob. 7QECh. 13 - Prob. 8QECh. 13 - Prob. 9QECh. 13 - Prob. 10QECh. 13 - Prob. 11QECh. 13 - Prob. 12QECh. 13 - Prob. 13QECh. 13 - Prob. 14QECh. 13 - Prob. 15QECh. 13 - Prob. 16QECh. 13 - Prob. 17QECh. 13 - Prob. 18QECh. 13 - Prob. 19QECh. 13 - Prob. 20QECh. 13 - Prob. 1QAPCh. 13 - Prob. 2QAPCh. 13 - Prob. 3QAPCh. 13 - Prob. 4QAPCh. 13 - Prob. 5QAPCh. 13 - Prob. 1IPCh. 13 - Prob. 2IPCh. 13 - Prob. 3IPCh. 13 - Prob. 4IPCh. 13 - Prob. 5IP
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- Whether the consumers or the producers will benefit from the technological progress in a perfectly competitive market with cost conditions? comment using suitable diagrams and toolsarrow_forwardIn the long-run equilibrium, what is the price? what is the output? what is the total profit?arrow_forwardSuppose a firm in a perfectly competitive industry develops a manufacturing innovation that lower its variable cost of production. What are the short run impacts of this innovation on both the firm and the industry? Please include a graph to illustrate the short run impacts. What are the long run impacts on both the firm and industry? Please include a graph to illustrate the long run impacts.arrow_forward
- Is it even better for perfectly competitive firms to produce output even though it is losing money? If so, when?arrow_forwardUsing the tools of economic analysis that you learned, analyze the behavior of the enterprise operating in the perfectly competitive market, in both the short and long term, if it achieves an economic loss in the short term.arrow_forwardIn the long run, perfectly competitive firms make zero economic profit. If this is the case, why does the firm even bother producing? Why not exit the market completely?arrow_forward
- Long-run equilibrium in perfectly competitive markets meets two important conditions: allocative efficiency and _________ efficiency.arrow_forwardMicroeconomics II is the most fun course you ever took. Explain? A profit-maximizing competitive firm uses just one input, x. Its production function is q= 4(x)^1/2. The price of out-put is $28 and the factor price is $7. The amount of the factor that the firm demands is?arrow_forwardPerfectly competitive industries have free entry and exit in the long run. When will firms decide to enter an industry? How does free entry and exit affect a perfectly competitive firm’s profit in the long run?arrow_forward
- What is output per firm at the long-run equilibrium price? What is the long-run equilibrium profit?arrow_forwardEconomics At a price of $21 will the firm produce in the short run? If so, what is the profit or loss? Same questions as #1 except use a price of $34? Same questions as #1, except use a price of $45? From the information in the table, can you determine the short run supply curve? If so, what would it be? What would happen at the $45 price level in the long run, to profits, price, number of firms in the industry, assuming constant costs?arrow_forwardFor each of the following events identify which of the determinates of demand or supply are affected. Also indicate whether demand or supply is increased or decreased. Why? A stock market crash lowers people’s wealth. Batelco increases the prices of mobile services. Diminishing returns mean rising costs while economies of scale mean falling costs. Therefore, a firm cannot be facing both diminishing returns and economies of scale. Do you agree? Why or why not?arrow_forward
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