7. A perfectly competitive market mainly benefits: O business owners of the firms. O consumers of goods and services produced under perfect competition. O employees of perfectly competitive firms. O all the other answers are correct.
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- 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?QUESTION 9 In a perfectly competitive market there are a. few buyers and few sellers. O b. many buyers and many sellers. O c. many buyers and few sellers. O d. few buyers and many sellers.4. The price of the output of a perfectly competitive firm is set by: O supply and demand in the market. 4 O the firm in order to minimize marginal cost. O the government in order to increase the number of firms. O consumers who see a slightly higher price as meaning better quality
- Wheat is produced in a perfectly competitive market. Market demand for wheat increases. This will cause the individual wheat farmer's marqinal revenue to maximizing level of output to and their profit- O a. decrease; increase O b. decrease; decrease O c. increase; increase d. increase: decrease4. 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?1. Which of the following is NOT a characteristic of a perfectly competitive market? a. Goods offered for sale are individual unique c. Firms are free to enter and free to leave the market b. Goods offered for sale are essentially identical d. Firms are price takers since there are many sellers in the market Hint: The three important characteristics of a perfectly competitive market include (i) there are many buyers and sellers (which means an individual buyer is a price taker and an individual seller/producer is a price taker), (ii) every producer/firm sell a resemble/identical product, and (iii) free enter and free exit (which means if the competitive market realizes a positive profit, a new firm is able to enter freely without any fee nor any barrier. Oppositely, if any existing competitive firm earns a negative profit, it is allowed to leave the market freely without any fee nor any barrier).
- Which of the following is characteristic of a perfectly competitive market? a. There is free entry into and exit from the market. b. Individual firms can exert a perceptible influence on the market price. c. The firms in the market produce differentiated products. O d. All of the above are true.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.What assumptions are necessary for a market to be perfectly competitive? Explain why each of these assumptions is important. Consider the market for wheat which is a perfectly competitive market. Is the market demand curve the same as the demand curve facing an individual producer? If not, explain how and why they are different? Lastly, of the following industries, which are perfectly competitive? For those that are not perfectly competitive, explain why. a. Restaurants b. Corn c. College education d. Local radio and television It should be atleast 2 to 3 word pages with work cited page
- 1.Describe any four requirements for a perfectly competitive goods market.4. Profit maximization in the cost-curve diagram A Consider a perfectly competitive market for shirts. The following graph shows the daily cost curves of a firm operating in this market. PRICE Dollars per sht 20 HE 16 12 34 LE AD 72 OUTPUT (Theunts of shirts! Chow Ad In the short run, at a market price of $185 per shirt, this firm will choose to produce shirts per day. On the previous graph, use the blue rectangle (dirde symbols) to shade the area representing the firm's economic profit or loss if the market price is $18 and the firm chooses to produce the quantity you already selected. Tool tip: Mouse over the shaded region on the graph to see its area. The area of this rectangle indicates that the firm would have per day. For each price in the following table, calculate the firm's optimal quantity of units produced and determine the economic profit or loss if it produces at that quantity. Use the data from the previous graph to identify its total variable cost. Assume that if the…1. Which of the following is NOTa characteristic ofa perfectly competitive market? a. Buyers and sellers are price takers c. Free entry is limited b. Each firm sells a virtually identical product d. Each firm chooses an output level that maximizes profits