One of the key assumptions of perfect competition is
Technology is unequal among firms |
||
Price is set by each firm |
||
Firms have the same long and short run cost curves |
||
Firms do not have the same information |
One of the key assumptions of perfect competition is Technology is unequal among firms Price is...
When do firms decide to shut down production in the short run under perfect competition? Explain carefully. The market for bread in Brooklyn, NY is characterized by perfect competition. Firms and consumers are price takers and in the long run there is free entry and exit of firms in this industry. Illustrate with the help of a graph how the individual firm maximizes profit in the short run.
1. Consider the last problem of Homework 2: Perfect Competition - consider a perfectly competitive market that has 4 firms in it (assume it is perfectly competitive despite their being only 4 firms). Two of the firms use technology A and two of the firms use technology B. The respective costs of producing using technology A and B are given by the cost functions: CA9A) = 40 + 29A +37A2 CB(9B) = 30 + 398 +298? Demand is given by...
12.) Which of the following is not a characteristic of perfect competition? a. All goods sold are identical. b. Firms and consumers all have perfect information about the good and market. c. all consumers have identical individual demand curves d. Sellers can enter the market easily. 13.)For a perfectly competitive firm in the short run, if the following conditions are true, P = MR = MC > AC, then a. the firm is maximizing profits and is making an economic...
One thing that makes monopolistic competition similar to perfect competition is that, in the a short run, neither can earn positive economic profit. b long run, both are guaranteed positive economic profit. c long run, both will earn zero economic profit. d short run, both are guaranteed positive economic profit. e long run, both could earn positive economic profit, but monopolistic competitors will earn more than perfect competitors. Refer to the following graph to answer the following questions: In the...
2) What long run? Explain. assumptions in the perfect competition model ensure that economic profit is zero in the Answer: is the significance of the mutual interdependence among the firms in an oligopolistic arket? nswer
If any of the assumptions of perfect competition are violated, Select one: a. supply-and-demand analysis cannot be used to study the industry. b.graphs with flat demand curves cannot be used to study the firm. c.graphs with downward-sloping demand curves cannot be used to study the firm. d. there may still be enough competition in the industry to make the model of perfect competition usable. e. one must use the monopoly model instead.
List the five assumptions of perfect competition and tell how they combine to insure that in the long-run, a firm in a perfectly competitive industry makes zero profit and is a price taker.
The characteristics of perfect competition are: ___________________, _____________________, ________________________ ___________________, ___________________ 2. The demand curve in perfect competition is: ______________ (Shape or slope) 3. The firm operates at the quantity where _________ equals ___________. 4. Total profit is equal to ___________ minus ________________. 5. The marginal revenue curve in perfect competition is: ______________ (Shape or slope) 6. The entrance of one or two new firms (in perfect competition) does what to market price? _______________________________________, 7. For a firm to operate,...
5. List the five assumptions of perfect competition and tell how they combine to insure that in the long-run, a firm in a perfectly competitive industry makes zero profit and is a price taker.
1. (25 points) The market for study desks is characterized by perfect competition. Firms and consumers are price takers and in the long run there is free entry and exit of firms in this industry. All firms are identical in terms of their technological capabilities. Thus the cost function as given below for a representative firm can be assumed to function faced by each firm in the industry. The total cost and marginal cost functions t the representative firm are...