Chapter 14, Problem 2QFR

For each of the following scenarios, identify the number of firms present, the type of product, and the appropriate market model. Select the matching entry for each dropdown box in the following table. Scenario Number of Firms Type of Product Market Model A large city has lots of small shops where people can buy sweaters. Each store's sweaters reflect the style of that particular store. Additionally, some stores use higher-quality yarn than others, which is reflected in their price.                There are dozens of pasta producers that sell pasta to hundreds of Italian restaurants nationwide. The restaurant owners buy from the cheapest pasta producer they can. While pasta manufacturers must pay licensing fees to their local government and undergo regular food-safety inspections, anyone who has passed inspections can acquire and maintain their license.                Only three airlines fly from San Francisco to Medford, Oregon. No new airline will enter…

Where average costs of production are lowest when all output is produced by a single firm.

Briefly discuss physical capital investment and long-run average cost in relation to a perfectly competitive market.

The transition from ‘brick and mortar’ to the digital economy raises a number of questions: Does the textbook model of perfect competition apply in virtual markets? provide answer with 1 example

In industrial location theory, the following is NOT true of agglomeration effects. Agglomeration economies reflect cost savings that result from the clustering of economic activities. Agglomeration effects may explain why some firms choose to locate near their competitors. Agglomeration refers to the clustering of activities for mutual benefit. Alfred Weber did not consider agglomeration in his theory of industrial location.