In a perfectly competitive market. A company launches a new technology that gives the company considerably lower average costs than other competitors. What are the effects on price, output and profits in the short and long run
Q: Suppose that an arena has a capacity of 20,000 seats. Over the course of a weekend, a tournament…
A: Total Number of seats in arena = 20,000Number of teams = 6Fans of each team = 2000Number of general…
Q: Look at the market for private education in Figure 11.4.2. The government grants a subsidy to…
A: In еconomics, еquilibrium rеfеrs to a statе of balancе or stability in a markеt whеrе thе quantity…
Q: ces Refer to the table below. Real Output Demanded, Original, Billions $506 508 510 512 514 Price…
A: Inflationary Gap:The inflationary gap is computed by comparing the actual real GDP with the GDP…
Q: Corporations may officers, directors, employees, and agents when they act in good faith, consistent…
A: Corporation refers to a legal entity that made by many individuals who work independently from their…
Q: P12 86432 S D 4 6 8 9 10 12 Calculate the PS at the world price. Assume the following facts: The…
A: The world price is $2 per unit. The tariff imposed by the domestic country is $1 per unit. The…
Q: You have 300 dollars and have the ambition of extracting arbitrage across time. The interest rate in…
A: The objective of the question is to calculate the profit that can be made by entering a future…
Q: Question 11 Most social workers engage in some form of international practice because of what? O…
A: The correct answer is: Many people who live or have lived in other countries have been affected by…
Q: The following table shows the willingness to pay for a good for the only four consumers in a market.…
A: The willingness to pay for the four consumers are provided below. ConsumersWillingness to…
Q: The direct exchange rate of Rupee in the US is 0.4. The direct exchange or Rupee in the UK is 0.25.…
A: The objective of the question is to calculate the cross rate of the British pound for the US. The…
Q: From the article: While Columbus Washboard appears to hold a monopoly, there arent indications it…
A: A monopoly refers to a market structure in which a single seller or entity dominates the supply of a…
Q: Firm A and B both produce good Q. Demand is Q-45-0.5P, where P is price. Both firms have total cost…
A: Consumer surplus represents the difference between what a consumer is willing to pay for a good or…
Q: Suppose that the MPC in North Laurasia is 0.6. a. What is the spending multiplier for the North…
A: The multiplier effect implies the phenomenon where a change in one economic variable leads to a more…
Q: 21. If the percentage change in nominal income is 20% and Percentage change in price level is 15 %,…
A: To figure the rate change in veritable compensation, you can include the recipe for the rate change…
Q: the uncovered interest parity holds and people are risk-neutral. A Chinese deposit pays 5%, the spot…
A: The objective of the question is to find out the interest rate of a US deposit given the interest…
Q: The newspaper article from Barbados below where Interest rate increases by central banks constitute…
A: Monetary policy is the tool used by the central bank of the nation to control the money supply in…
Q: Which of the following is true concerning the use of response cost in a token economy? O it should…
A: Since you have two independent McQs, according to the guidelines, only the first McQ is answered. To…
Q: 1.Do you think the standard IMF policy prescriptions of tight monetary policy and reduced government…
A: Monetary policy alludes to the arrangement of activities and measures executed by a country's…
Q: Alison Bob Television $20 $12 A. $12, $18 B. $12, $24 C. $20, $18 D. $20, $24 Internet $18 $24…
A: Marginal willingness to pay represents the additional amount a consumer is willing to spend for one…
Q: nflation rate is 6 percent a year, the unemployment rate is 4 percent, and the economy is at full…
A: Philips curve shows the inverse relationship between the inflation rate and the unemployment rate.…
Q: Please label the statements regarding child labor as true or false. You are currently in a labeling…
A: Child labor, in economic terms, refers to the engagement of children in work that deprives them of…
Q: 1) Suppose that the Shapiro administration is considering two possible policies meant to discourage…
A: We are analyzing the effects of a quota on the market for steel in Pittsburgh, where the demand and…
Q: Asim True increase production from 7 to 8 fire engines because the True or False: If alternatively…
A: Monopoly market structure has only a single seller in the market. Under monopoly the seller has the…
Q: The dollar appreciated by 25% relative to the yen and the direct exchange rate is now 0.01 in the…
A: The objective of the question is to find the old exchange rate prior to the dollar appreciation. The…
Q: People expect the Canadian dollar to be 0.9 US dollars. The interest rates were equal in the two…
A: Uncovered Interest Parity (UIP) is an economic concept that expresses the relationship between…
Q: Assume the following to be a portion of the simplified balance of payments statement for a…
A: The simplified balance of payment table for the given economy is stated below.…
Q: If two parties trade based on comparative advantage and both gain, in what range must the price of…
A: The ability of an economy to produce a specific good or service at a lower opportunity cost than its…
Q: The newspaper article from Barbados below where Interest rate increases by central banks constitute…
A: The objective of the question is to illustrate the impact of an increase in interest rates, a…
Q: The Hull Petroleum Company and Inverted V are retail gasoline franchises that compete in a local…
A: In a Bertrand oligopoly, firms determine prices (not quantity) independently to maximize profits.…
Q: Suppose the nominal interest rate on savings accounts is 11% per year, and both actual and expected…
A: Unexpected inflation is the inflation experienced that is above or below what was expected. It…
Q: 1. Why wages differ For each of the scenarios in the following table, indicate the most likely…
A: Workers can get different wages based on their ability, age, gender, ethnicity etc. There are wage…
Q: The table below shows the total cost (TC) and marginal cost (MC) for Choco Lovers, a purely…
A: The profit-maximizing condition for a perfectly competitive firm is given as follows:P = MC = MR
Q: includes the wages paid to workers, the cost of any benefits the worker receives, and other expenses…
A: When a manufacturer sets the sales price of a product, the firm takes into account the costs of…
Q: 12.02-PR004 CustomMetalworks is considering the expansion of their cable fabrication business for…
A: 5 indivisible projects are given below:Each investment will provide an exit with full return of the…
Q: Refer to Figure 8-5. This firm can be a "cost minimizer" by producing on isocost line
A: A firm minimizes cost at the tangency point of the isocost line and isoquant curve. The isoquant…
Q: Price $20 18 16- 14 12 10- 8 100 200 B 300 400 + 500 600 D Quantity Starting at P = $18, if we…
A: Total revenue is the amount obtained by multiplying the price per unit by the quantity of output. It…
Q: In this graph, if firms are producing at level Y2, then inventories will _____, inducing firms to…
A: In business inventory refers to the stock of goods and services which business holds for the…
Q: increase production from 8 to 9 fire engines because the True or False: If alternatively Femi's…
A: The demand curve represents the quantity demanded by consumers at different price levels. Total…
Q: The Governing Council of the Bank of Canada Multiple Choice O composed of members that are appointed…
A: The correct option is:B) Can make an independent decision on monetary policy changes.The Bank of…
Q: There is often a temptation to take a dim view of profits. Some people seem to believe profits come…
A: Perspectives on economics cover a range of views regarding theories, policies, and issues. They…
Q: Neoliberalism proponents believe that _________________ a. regulation should be largely removed from…
A: Economics is a subject matter that focuses on the rational management of scarce resources that have…
Q: QUESTION 6 P (products price level) Short-run Aggregate Supply Keynesian range Classical or…
A: The objective of the question is to identify which of the given statements about the Keynesian and…
Q: Consider a hypothetical closed economy with a government. Total government expenditure is PhP 1000.…
A: “Since you have posted multiple questions, we will provide the solution only to the first question…
Q: After it was named a "superfood", demand for kale increased dramatically (some sources say by 60%…
A: Price support is a kind of assistance program run by the government of a nation to support producers…
Q: 7. The money creation process Suppose Southeast Mutual Bank, Walls Fergo Bank, and PJMorton Bank all…
A: The reserve ratio, commonly known as the reserve requirement, is the proportion of deposits that…
Q: Refer to Figure 8-5. Which area represents consumer surplus before the tax was levied? O a. A +B O…
A: The consumer surplus is the gap between the maximum price a consumer wants to pay and actual price a…
Q: In an open economy, gross domestic product equals $2,460 billion, consumption expenditure equals…
A: Gross Domestic Product (GDP) is the sum of all the production that has taken place within the…
Q: The domestic demand and supply of some good is as follows: Qd = 100 -0.25P Qs = P - 50 The world…
A: A tariff is a tax imposed on imports of the country. Tariff imposed protects domestic producers from…
Q: A couple with a newborn daughter wants to establish a college fund to pay for future college…
A: Here is the timeline diagram illustrating the college fund planning for the daughter:
Q: Table 10.1 shows the output, price, and total cost for a monopolistic competitor. The…
A: A monopolist prefers to continue its production till it reaches a point where marginal cost equals…
Q: Why is an income statement important for a business?
A: The income statement is a report of a business. It shows how much money the business made and how…
Step by step
Solved in 3 steps
- In the long run, perfectly competitive firms make zero economic profit. If this is the case, why does the firm even bother producing? Why not exit the market completely?Suppose the shirts industry is perfectly competitive and begins in a long-run equilibrium. (a) Pluto Company invents a new production process that reduces the production cost. What happens to Pluto Company’s profits and the price of shirts in the short run when Pluto Company’s patent prevents other firms from using the new technology? (b) What happens in the long run when the patent expires and other firms are free to use the technology?If firms in a competitive industry incur an economic profit, what happens to supply, price, output, and economic profit in the long run? Explain
- 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? The number of farms can new firms enter the market? If they can, what will happen to the market supply curve? If they cannot enter, explain.Perfectly competitive industries have free entry and exit in the long run. When will firms decide to enter an industry? How does free entry and exit affect a perfectly competitive firm’s profit in the long run?Why don't firms in a competitive market have excess capacity in the long run?
- Juan makes dining room chairs in a perfectly competitive industry. He is looking for economic advice and tells you the following data about his business. (Assume cost curves have their standard shapes.) Total revenue is $120,000, Total fixed costs are $100,000 Total variable costs are $110,000 Marginal cost is $200/unit Quantity produced is 600 units What will you suggest to Juan? A: Shut down immediately B: Do not shut down and increase production C: Do not shut down but decrease production D: Do not shut down and do not change the current production level.What is the main feature of a perfect competitive market. Explain in long sentences.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? The equilibrium output in agricultural markets based on what happens to the price given the change in supply, what do you think will happen to the equilibrium quantity? Will it remain the same, increase or decrease?
- Explain why economic profits in all perfectly competitive markets will tend toward zero in the long run. Is this a good thing or a bad thing for producers and consumers? Explain.What are the requirements for a perfect competition market?Explain in detail how purely competitive markets, in the long-run, know how to adjust to and provide the correct output, at the correct price. Give an example of a good or service you might buy that is closest to being in a purely competitive market. Explain your logic.
