Principles of Economics 2e
Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
Textbook Question
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Chapter 8, Problem 17RQ

Briefly explain the reason for the shape of a marginal revenue curve for a perfectly competitive firm.

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Why is the demand curve facing an individual firm in a perfectly competitive market horizontal? Does this mean that consumers do not respond to price changes? Briefly explain. Suppose that firms operating in a perfectly competitive industry are experiencing positiveprofits (profits > 0). What do we expect to happen to the number of firms in this industry?What will happen to the profits of firms in this industry over the long-term? Explain
Goldbar is an energy bar firm selling in a perfectly competitive market but is considering the impacts of changes. Imagine you are a loan agency and Goldbar executives came to you with the following request: "At Goldbar, we need $100,000, and we will use that money to advertise to increase demand for energy bars." Thoroughly analyze this quote using economic terms.
A competitive firm's supply curve is identical to its marginal cost curve. True or false? Briefly explain.

Chapter 8 Solutions

Principles of Economics 2e

Ch. 8 - A single firm in a perfectly competitive market is...Ch. 8 - What are the four basic assumptions of perfect...Ch. 8 - What is a price taker firm?Ch. 8 - How does a perfectly competitive firm decide what...Ch. 8 - What prevents a perfectly competitive firm from...Ch. 8 - How does a perfectly competitive film calculate...Ch. 8 - Briefly explain the reason for the shape of a...Ch. 8 - What two rules does a perfectly competitive firm...Ch. 8 - How does the average cost curve help to show...Ch. 8 - What two lines on a cost curve diagram intersect...Ch. 8 - Should a firm shut down immediately if it is...Ch. 8 - How does the average variable cost curve help a...Ch. 8 - What two lines on a cost curve diagram intersect...Ch. 8 - Why does entry occur?Ch. 8 - Why does exit occur?Ch. 8 - Do entry and exit occur in the short run, the long...Ch. 8 - What price will a perfectly competitive firm end...Ch. 8 - Will a perfectly competitive market display...Ch. 8 - Will a perfectly competitive market display...Ch. 8 - Finding a life partner is a complicated process...Ch. 8 - Can you name five examples of perfectly...Ch. 8 - Your company operates in a perfectly competitive...Ch. 8 - Since a perfectly competitive firm can sell as...Ch. 8 - Many films in the United States file for...Ch. 8 - Why will profits for films in a perfectly...Ch. 8 - Why will losses for firms in a perfectly...Ch. 8 - Assuming that the market for cigarettes is in...Ch. 8 - In the argument for why perfect competition is...Ch. 8 - The AAA Aquarium Co. sells aquariums for 20 each....Ch. 8 - Perfectly competitive firm Doggies Paradise Inc....Ch. 8 - A computer company produces affordable,...
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