Assume the firms in a perfectly competitive market are initially incurring economic losses. An increase in supply would cause existing firms' economic losses to decrease. True OR False?
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- All buyers in a perfectly competitive market set prices to compete in their market? is it true or falseIn the long run, when there are economic losses, firms leave the industry, which will decrease the market supply and increase the price until economic losses are zero. True FalseWill a profit-maximizing firm in a competitive market ever produce a positive level of output in the range where the marginal cost is falling? Give an explanation.
- Do you agree with the following statement? Give reasons with a complete explanation for your answer. Production possibilities frontiers can shift upwards without an increase in resources. The demand for a commodity increase when the price of its substitute increases. The income elasticity of the demand for luxury goods is always positive. Under perfect competition, a firm fix its price where its AR=MRSuppose that we have a perfectly competitive market with inverse market demand P = 1000-10Q and inverse market supply P = 250+5Q. A. What is the equilibrium price and quantity in this market? B. Suppose the market is populated by identical firms whose total costs are TC = 100+4000 + 250² and whose marginal costs are MC = 400 + 50Q. How much output should each firm produce in the short run? C. What are each firm's profits? D. How many firms are there currently in the market? What do you think will happen to the number of firms in the long run?In a perfectly competitive market, firms that remain in the market in the long run produce at the efficient scale because minimizing costs always maximizes profits. markets are always efficient. their supply curve is horizontal. they are price takers and must make zero profits in the long run.
- You witnessed new firms entering a competitive market. What can you infer for the existing firms in that market?The market for quinoa is perfectly competitive and consists of firms that all have the same cost function, C(q) = 200 + g²/2. What is each firm's supply function? Oq = Oq = p Oq = p+ 25 Oq = p - 25 Suppose the market is in a long-run equilibrium. What is the price of quinoa? Op = 5 Op = 10 Op = 15 Op = 20 Op = 25 The market-level demand curve is Qp = 2000 - 50p. What is the equilibrium market-level quantity? Og = 250 Oq = 500 Oq = 750The market for paperback detective novels is perfectly competitive. We have two types of book publishers in the market- Small Press and Large Press. Each Small Press publisher's supply curve is given by P=76+5Q. Each Large Press publisher's supply curve is given by Q=2P-24 Suppose there is only 1 publisher of each type. What is market supply when market price is $60? Enter a number only. Remember, fractions of goods are possible.
- why competitive firms stay in business if they make zero profit?In competitive markets, there are many small firms with each firm unable to influence the market price. Suppose company ABX operates in the wheat market. The company produces and markets wheats at a Price = $20 per container. The firm’s total costs are given as: TC = 50 +2Q + 3Q2 What level of output should the firm produce? Hint: Set P = MC and solve for Q. Use a graph to show your answers as wellWhich of the following is not true for a competitive market? Group of answer choices Firms can earn positive economic profits in the long run Firms sell nearly identical products There are many buyers and sellers Firms expect zero economic long-run profits
