ECON: MICRO4 (New, Engaging Titles from 4LTR Press)
4th Edition
ISBN: 9781285423548
Author: William A. McEachern
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
thumb_up100%
Chapter 8, Problem 1.2PA
To determine
The features of
Introduction:
Perfect competition: It is a form of the market structure in which there are large number of buyers and sellers which sells homogenous product at uniform price which is determined by the industry.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
3 examples of perfectly competitive markets and does these firms profit in long run or short run
Multiple choice - microeconomics
39) A profit-maximizing firm in a competitive market produces small rubber balls. When the market price for small rubber balls falls below the minimum of its average total cost but still lies above the minimum of average variable cost, what happens to the firm?
A. It will experience losses, but it will continue to produce rubber balls.
B. It will be earning only accounting profits.
C. It will be earning both economic and accounting profits.
D. It will shut down.
38)
Question 7
Which of the following statements is not true? Economies of scale
means lower average cost when production increases.
can arise as a result of specialisation of labour.
are different than economies of scope.
cannot arise on a market with perfect competition.
Chapter 8 Solutions
ECON: MICRO4 (New, Engaging Titles from 4LTR Press)
Knowledge Booster
Similar questions
- Do entry and exit occur in the short run, the long run, both, or neither?arrow_forwardMany films in the United States file for bankruptcy every year, yet they still continue operating. Why would they do this instead of completely shutting down?arrow_forward27- Under perfect competition, entry of new firms into the market in the long run tends to: Select one: a. raise the level of profit of the existing firms. b. reduce the market power of the existing firms. c.raise the aggregate supply. d. raise the aggregate demand for goods. e. reduce the degree of competitiveness in the market.arrow_forward
- 4.Average variable cost is found by dividing.............. a. variable cost by output b. output by variable cost c. marginal cost by output d. output by marginal cost 5. A profit maximizing firm will increase production a. price is less than marginal cost b. price equals marginal cost c. price exceeds marginal revenue d. price exceeds marginal cost 6. Which statement is true? a. Accounting profits are greater than economic profits. b. Economic profits are greater than accounting profits. c. Accounting profits are equal to economic profits...arrow_forwardEconomics Managing forces of competition is a significant determinant of the business strategy of a firm. What is the role of economies of scale to determine the success of a firm in managing forces of competition? Explain. What is the role of advertising to determine the success of a firm in managing forces of competition? Explain.arrow_forward1. A) What are the underlying assumptions associated with Perfect Competition? B) Explain why firms operating under Perfect Competition make normal economic profit in the long-run. C) Explain why Perfect Competition results in Allocative Efficiency. D)Explain why Perfect Competition results in Economic Efficiency.arrow_forward
- Table 11.4 Number of Workers Total Product Product Price ($) 0 0 4 1 15 4 2 29 4 3 42 4 4 54 4 5 65 4 6 75 4 7 84 4 8 92 4 9 99 4 10 105 4 Refer to Table 11.4 for the data for a perfectly competitive firm. The first column shows the number of workers employed in production, the second column shows the total product of the firm, and the third column shows its product price. From the data in the table, it can be said that the marginal revenue product begins to decline with the second worker hired. Group of answer choices False Truearrow_forward27- Under perfect competition, entry of new firms into the market in the long run tends to: Select one: a. raise the level of profit of the existing firms. b. reduce the market power of the existing firms. c. raise the aggregate supply. d. raise the aggregate demand for goods. e. reduce the degree of competitiveness in the market. With neat explanationarrow_forwardQuestion 1 A profit-maximizing firm in a competitive market is currently producing 100 units of output. It has average revenue of $10, average total cost of $8, and fixed costs of $200. a. What is its profit? b. What is its marginal cost? c. What is its average variable cost? d. Is the efficient scale of the firm more than, less than, or exactly 100 units?arrow_forward
- According to perfect competition please answer question 5.7arrow_forward7..Comment on the following statement about perfect competition: A firm that has incurred a lot of fixed costs (such as buying or renting a large office, acquiring expensive machinery, etc.) is more likely to go out of business sooner when the market price of its product falls substantially, compared to a firm experiencing the same declining price but whose fixed costs are kept to a minimum. Do you agree? Why or why not?arrow_forwardDefine Perfect Competition in your own words and what are the characteristics of a Perfect Competition.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Economics 2eEconomicsISBN:9781947172364Author:Steven A. Greenlaw; David ShapiroPublisher:OpenStax
Principles of Economics 2e
Economics
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:OpenStax