Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
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Textbook Question
Chapter 8, Problem 3SCQ
Look at Table 8.13. What would happen to the film’s profits if the market price increases to
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Chapter 8 Solutions
Principles of Economics 2e
Ch. 8 - Firms ill a perfectly competitive market are said...Ch. 8 - Would independent trucking fit the characteristics...Ch. 8 - Look at Table 8.13. What would happen to the films...Ch. 8 - Suppose that the market price increases to 6, as...Ch. 8 - Explain in words why a profit-maximizing film will...Ch. 8 - A firms marginal cost curve above the average...Ch. 8 - If new technology in a perfectly competitive...Ch. 8 - A market in perfect competition is in long-run...Ch. 8 - Productive efficiency and allocative efficiency...Ch. 8 - Explain how the profit-maximizing rule of setting...
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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- you've been learning about what makes a market perfectly competitive, how a firm in a perfectly competitive market makes profit-maximizing decisions, and how a perfectly competitive market moves towards equilibirium. But how applicable is this to real life? For this discussion, try to think of a market (for a product or service) that is perfectly competitive or very close to it. What characteristics of the market make it like perfect competition? Are there factors that keep it from being perfectly competitive? If so, what are they? How close do you think the firms in this market are to perfectly competitive firms in choosing equilibrium price and quantity?arrow_forwardWhat does acceptable loss mean for a competitive firm? Explain and Draw a grapharrow_forwardWhat are some characteristics of perfect competition? Is the Banana market a perfect competition? When you are buying bananas, what is your decision making process? Do you have any favorite brand of banana? How can companies in the market compete? Please name some other examples of perfect competition?arrow_forward
- 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 cost of $200. What is its profit? What is its marginal cost? What is its average variable cost?arrow_forwardConsider the table of marginal costs of producing t-shirts in a perfectly competitive market below. If the market price is equal to $8, what is the profit maximizing number of t-shirts to produce and sell? Note the second column describes marginal costs. T-shirts Marginal Cost 0 - 1 6 2 3 3 6 4 9 5 11 6 14 Group of answer choices 0 1 2 3 4 5 6arrow_forwardLook at Table . What would happen to the firm’s profits if the market price increases to $6 per pack of raspberries?arrow_forward
- For each lettered space in the following table, determine the appropriate dollar amount (See the chart attached) Assume that the above cost data is for a perfectly competitive firm. Using this data answer the following: (a) If the market equilibrium price that this firm charges is $50, what level of output must this firm produce to maximize its profit? (b) What would be the amount of profit that this firm would earn if it produced at the profit-maximizing level of output? 3. You read in a business magazine that farmers are reaping high profits. With the theory of perfect competition in mind, what do you expect to happen over time (in the long run) to each of the following? a. The prices of agricultural products b. The profits of farmers c. The equilibrium output in agricultural markets d. The number of farms 4. Distinguish between economies of scale and diseconomies of scale. Give examples of why a…arrow_forwardShow on the graph the profit-maximizing output level Q*. Show on the graph a rectangle that represents the amount of the economic profit (or loss) associated with the profit-maximizing output level. Is there a loss or a profit?arrow_forwardWhy is a firm in a perfectly competitive market called a price taker?How does a firm in perfect competition decide its profit maximizingprice and quantity? Explainarrow_forward
- What are the five features of a perfect market competitive?arrow_forwardIn a long-run equilibrium in a perfectly competitive market, firms earn positive economic profits. Is this true?arrow_forwardAssume perfect competition takes place in the market for hotel rooms. The the current market equilibrium price of a standard room is RM300 per night. a. Show that the current market balance is efficient, assuming that both the marginal cost borne by the seller and the marginal profit which the buyer feels reflects all the costs and benefits associated with production and use of hotel rooms. Draw a graph to illustrate you answer.arrow_forward
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