Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506725
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Chapter 3, Problem 16CQ
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Describe the strong incentives of firms in competitive market to serve the consumers interest.
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Economics: Private and Public Choice (MindTap Course List)
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- Why are participants in competitive markets called price takers?arrow_forwardHow do firms or business in a competitive market decide what prices are and how does the economy look like? What if they are all selling the same product?arrow_forwardCar Manufacturer Scenario: Be specific and explain why you came to that conclusion using the principles of supply and demand.arrow_forward
- What are these mismatched trends telling us about how demand and supply work in the market?arrow_forwardExplain price determination in a competitive market, and show how equilibrium changes in response to changes in determinants of demand and supply.arrow_forwardMultiple choice - microeconomics 43) What will entry into a market by new firms do? A. It will increase the price of the good B. It will increase profits of existing firms C. It will increase the costs of existing firms D. It will increase the supply of the good. 42) What is one consideration that applies to the analysis of a market over the long run but not to the analysis over the short run? A. changes in firms’ cost structures B. changes in the numbers of firms in the market C. changes in the price of the product D. changes in firms’ profitsarrow_forward
- Friedrich von Hayek won the Nobel Prize in Economics in 1974. In awarding the prize, the Academy specifically referred to his conclusion quoting the Academy, not Hayek "that only by far-reaching decentralization in a market system with competition and free price-fixing is it possible to make full use of knowledge and information." What did the Academy mean?arrow_forwardWhy do we not rely on competitive markets to supply us with the “correct” quantity of money?arrow_forward. In a competitive market, how will the actions of any single buyer or seller impact the market price?arrow_forward
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