EBK PRINCIPLES OF MICROECONOMICS
7th Edition
ISBN: 9781305892811
Author: Mankiw
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Question
Chapter 4.1, Problem 1QQ
To determine
Market and perfect competitive market.
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8. In a perfectly competitive market:a. All goods or services in that market are similarb. The price is set by market equilibrium and individual sellers cannotinfluence the pricec. Sellers strive to supply the greatest quantity of the good or service at thelowest priced. Small groups of buyers and sellers can have a great influence on prices
Please answer fast
Price
(dollars
per pound)
S
Market
price
2
0
10
20
30
Supply of
apples
40
Demand
for apples
50
Quantity
(thousands of pounds)
Price and cost
(dollars
per pound)
Market
price
2
10
يلا
20
30
40
ATC
-D-MR
50
Quantity
thousands of pounds)
Given the two diagrams, the left showing the market supply and demand, the right
showing a typical individual firm in this competitive market, what would you expect
will happen over time?
Existing firms will increase output with positive profits.
Existing firms will exit the market and average profits by market firms will remain
positive.
New firms will enter the market and average profits by market firms will remain
positive.
Existing firms will exit the market and average profits by market firms will be
zero in the long run.
New firms will enter the market and average profits by market firms will be zero
in the long run.
Chapter 4 Solutions
EBK PRINCIPLES OF MICROECONOMICS
Ch. 4.1 - Prob. 1QQCh. 4.2 - Prob. 2QQCh. 4.3 - Prob. 3QQCh. 4.4 - Prob. 4QQCh. 4 - Prob. 1CQQCh. 4 - Prob. 2CQQCh. 4 - Prob. 3CQQCh. 4 - Prob. 4CQQCh. 4 - Prob. 5CQQCh. 4 - Prob. 6CQQ
Ch. 4 - Prob. 1QRCh. 4 - Prob. 2QRCh. 4 - Prob. 3QRCh. 4 - Prob. 4QRCh. 4 - Prob. 5QRCh. 4 - Prob. 6QRCh. 4 - Prob. 7QRCh. 4 - Prob. 8QRCh. 4 - Prob. 9QRCh. 4 - Prob. 1PACh. 4 - Prob. 2PACh. 4 - Consider the market for minivans. For each of the...Ch. 4 - Prob. 4PACh. 4 - Prob. 5PACh. 4 - Prob. 6PACh. 4 - Prob. 7PACh. 4 - Prob. 8PACh. 4 - Prob. 9PACh. 4 - Prob. 10PACh. 4 - Prob. 11PA
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Similar questions
- Firms ill a perfectly competitive market are said to be price takers that is, once the market determines an equilibrium price for the product, firms must accept this price. If you sell a product in a perfectly competitive market, but you are not happy with its price, would you raise the price, even by a cent?arrow_forwardTyped plzzz Asaparrow_forwardWhat is special about a purely competitive market?arrow_forward
- 1. Does a perfectly competitive market exist in real life? Look at the following markets and describe how close they are to perfect competition. i. Market for bottled water. ii. Market for foreign currency (say US$). iii. Market for pork buns.arrow_forwardDon't use Aiarrow_forwardThink about a competitive market in which youparticipate regularly. For each of the characteristicsof a competitive market, explain how your marketmeets these requirements.arrow_forward
- 4. Examine the behavior of perfect competitive markets. How are prices determined in competitive markets? How does competition affect the profits of a firm or industry? What does society gain from market competition?arrow_forward36. In a perfectly competitive market, which of the following shifts in the supply ourve deemand curves will definitely cause both the équilibrium price and quantity to decrease? Supply curve Demand curve- No shift Shifts to the right Shifts to the right Shifts to the left a. Shifts to the left Shifts to the right No shift No shift b.arrow_forwardWhat are the main characteristics ot a competitive market! Explain the difference between a firm's revenue and its profit. Which do firms maximize?arrow_forward
- Tips ips The following graph plots daily cost curves for a firm operating in the competitive market for instant pots. 100 PRICE (Dollars per instant pot) 8888 2 2 2 2 10 o ATC AVC MC ㅁㅁ 0 5 10 15 20 25 30 35 40 45 50 QUANTITY (Thousands of instant pots) Using the following table, for each price level, calculate the optimal quantity of units for the firm to produce. Using the data from the graph to determine the firm's total variable cost, calculate the profit or loss associated with producing that quantity. Assume that if the firm is indifferent between producing and shutting down, it will choose to produce. (Hint: Select purple points [diamond symbols] on the graph to receive exact average variable cost information.) Price (Dollars per instant pot) Quantity (Instant pots) Total Revenue (Dollars) Fixed Cost (Dollars) Variable Cost (Dollars) Profit (Dollars) 25.00 1,600,000 70.00 1,600,000 100.00 1,600,000 If the firm shuts down, it must incur its fixed costs (FC) in the short run. In…arrow_forward4. Profit maximization in the cost-curve diagram Suppose that the market for flannel shirts is a perfectly competitive market. The following graph shows the daily cost curves of a firm operating in thi market. 50 45 40 PRICE (Dollars per shirt) 10 8 д 8 35 35 ATC AVC 10 MC in 5 0 0 2 4 6 8 10 12 14 16 18 20 QUANTITY (Thousands of shirts) Profit or Loss In the short run, at a market price of $15 per shirt, this firm will choose to produce 10,000 shirts per day.arrow_forwardRefer to the information provided in Table 8.2 below to answer the question(s) that follow. Show your computation. Table 8.2 Number of Earrings TVC MC AVC TFC TC AFC ATC 100 1 50 95 3 46.67 4 300 5 270 7) Assume that Sherry's Earrings is producing in a perfectly competitive market and the market price for earrings is $60. To maximize profits, how many pairs of earrings should Sherry producearrow_forward
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