Give an example of a firm which competes in a competitive market. Explain. Suppose that the this market begins in long run equilibrium. Give an example of a factor that would cause the demand curve in this market to shift to the left. How will the market return to the long run equilibrium?
Q: Be sure to label the graphs. Suppose in the competitive market for a good known as “Tovars” that…
A: a. The short run effect of perfectly competitive firm can be illustrate as follows:
Q: Assume that a firm in a perfectly competitive market is making a loss in the short run. In the long…
A: 1) Assume that the firm in a perfectly competitive market and in the short run, it is making a…
Q: Suppose the shirts industry is perfectly competitive and begins in a long-run equilibrium. (a)…
A: Perfect competition refers to the situation where there are many buyers and sellers exist in the…
Q: graph shows the short run cot curve of a firm in a purely competitive market. Which of the following…
A: The profit maximizing output for the firm occurs where the (the upward sloping part of the) marginal…
Q: In the short run, if a competitive firm is making profit, the firm should produce. But if a…
A: A firm incurs losses if the total costs exceed the total revenue. The excess of the total cost over…
Q: Based on the given graph: a. If this firm profit-maximizes, how much output will it produce and…
A: Given;
Q: • Please explain the difference between the short run and long run equilibrium under a per- fectly…
A: Perfect competition is the market structure which is characterized by a large number of firms with…
Q: a. Is the firm making an economic profit or loss? b. Will firms enter or exit this market? c. Sketch…
A: Firms in a perfectly competitive market face a perfectly elastic individual demand curve as they…
Q: Use the following to answer questions 3-6: The market for sweet potatoes consists of 10 identical…
A: Total cost (TC): - it is the sum of fixed and variable costs incurred in the production process.…
Q: When will a firm enter a competitive market?
A: Perfect competition refers to the situation where there are large number of prouder and consumers…
Q: The graph below shows a perfectly competitive firm in short run equilibrium, where the firm has…
A: The profit-maximizing output level is acquired at the intersection of the marginal cost and marginal…
Q: Using graph, explain when the firm in a competitive market is in equilibrium?
A: A market is a place where the buyers and the sellers interact with each other and the exchange of…
Q: Why is a firm in a perfectly competitive market called a price taker? Why do the price, MR and…
A: A perfectly competitive market structure is where many firms function but none of them are large…
Q: Answer the following, providing a graphical illustration along with your answer where necessary: a)…
A: Note:- Since we can only answer one question at a time, we'll answer the first one. Please repost…
Q: What is meant by a competitive firm? Explain the difference between a firm’s revenue and its profit.…
A: The firm is an individual unit of the business which produce and sell the product in the market. The…
Q: What are the Characteristics of a Purely Competitive Market?
A: Characteristics of a Purely Competitive Market: The Purely competitive market is the market…
Q: If economic profits are being made in a perfectly competitive market, then firms will ________ the…
A: The equilibrium price and quantity of a good sold in the market are determined by the forces of…
Q: P S MC ATC D= MR Refer to the accompanying graphs for a competitive market in the short run. Which…
A: The competitive market is the market structure where a large number of buyers and sellers are taking…
Q: At what point would a competitive firm shut down in the short run
A: A competitive firm is a price taker, which means the firm takes the price determined by the market…
Q: Imagine a firm in a perfectly competitive market. The firm is currently making an economic profit.…
A: Perfect competition happens when all organizations sell indistinguishable items, market proportion…
Q: Suppose that the shrimp industry is in long-run equilibrium at a price of $5 per pound of shrimp and…
A: Given; Equilibrium price of shrimp= $5 Equilibrium quantity of shrimp= 300 million pound Centre of…
Q: Question 17 Referring to Figure 1 in Question 14, When price is $175, will firms enter or exit the…
A: Perfect competition is a type of market structure.
Q: 08. Which of the following holds for a perfectly competitive firm that is in long-run competitive…
A: 08. Price is equal to marginal cost is long run competitive equilibrium condition of a perfectly…
Q: You read in a business magazine that farmers are reaping high profits. With the theory of perfect…
A: Perfect competition is a market structure where are large numbers of buyers and sellers. The sellers…
Q: If a firm makes zero economic profit, it will exit the market in the long run. Do you agree?…
A: No economic profit is also referred as normal profit. Economic profit is calculated by subtracting…
Q: Is the firm making an economic profit or loss? Will firms enter or exit this market? 3. Sketch on…
A: 1. The firm is operating at the point where the marginal revenue equals the marginal cost in the…
Q: Briefly explain the reason for why in a competitive market we expect economic profits to be zero in…
A: A competitive market, also known as perfect competition, is a kind of market where there are a large…
Q: The market for fertilizer is perfectly competitive. Firms in the market are producing output but are…
A: The markets are the place where the buyers and sellers of the goods, and services meet and interact…
Q: Below is a two-diagram model representing a perfectly competitive market and a representative firm…
A: All firms get only normal profit over the long run. A firm can get positive or abnormal profit over…
Q: Graphically show the market and firm graphs for the perfectly competitive long run market when firms…
A: Initial long-run equilibrium in the market and firm. It is given that it is a perfectly competitive…
Q: What is the main feature of a perfect competitive market.
A: Perfect competitive market The term "perfectly competitive market" refers to a scenario in which a…
Q: Explain why P=MC in the short run equilibrium of the perfectly competitive firm, whereas in long run…
A: Economic efficiency includes the allocative (P = MC) and productive (MC = AC) efficiencies. Both…
Q: Suppose the book-printing industry is competitive and begins in long-run equilibrium. a. Draw a…
A: a) Typical firm in the industry The Above figure 1 shows the curves of a typical firm in the…
Q: Explain what the long run profit conditions are for a perfectly competitive market
A: Perfectly Competitive Market is the one where there are large number of buyers and sellers, selling…
Q: In the short-run equilibrium of a perfectly competitive market with identical firms that are…
A: Perfect competition is a type of market organization in which there are many buyers and sellers of a…
Q: Predict and explain the long run equilibrium of a firm operating in a perfectly competitive market?
A: The structure of the market where there are a large number of buyers and sellers selling homogenous…
Q: Consider a perfectly competitive market where all firms produce using the same technology. The…
A: Consider the perfectly competitive market where all firms produce using the same technology. The…
Q: 4. The market for fertilizer is perfectly competitive. Firms in the market are producing output but…
A: The markets are considered to be of utmost importance for the proper functioning of the economies.…
Q: Assume that apples are produced in a perfectly competitive market. Grande’s Orchard is a typical…
A: When market demand increases, the value of the nice rises, and therefore the market quantity…
Q: A firm is selling apples is profit-maximizing, but they're in a constant cost industry. The industry…
A: The normal goods are those goods whose demand tend to have a positive relationship with the income…
Q: In a perfectly competitive market ,why does the firm always break even in the long run ? Illustrate…
A: In perfect competition, in the very short run firms experience profits. However, new firms enter…
Q: “That segment of a competitive firm’s marginal-cost curve that lies above its average-variable-cost…
A:
Q: Why is a firm in a perfectly competitive market called a price taker? Why do the price, MR and…
A: Perfect competition: It refers to the market in which the firms are the price taker and the buyers…
Q: What is the shape of the demand curve faced by the perfectly competitive firm? Explain your answer…
A: Perfect competition is the type of market structure in which there are many buyers and sellers of a…
Q: Consider the graph of a firm in a perfectly competitive market to answer the question below: MC 10…
A: Profit is maximized at a point where MR is equal to MC.
Q: In the long run, a perfectly competitive firm can
A: The ideal kind of market structure is known as "perfect competition," and it occurs when all…
Q: -run equilibrium in a perfectly competitive market, firms earn positive economic profits. Is…
A: A perfect competition is where there is free market entry for the firms. If the firm earns profits…
Step by step
Solved in 2 steps
- A market in perfect competition is in long-run equilibrium. What happens to the market if labor unions are able to increase wages for workers?Using graph, explain when the firm in a competitive market is in equilibrium?Suppose the market for fresh pork is a competitive market. Initially, it is operatingat its long-run competitive equilibrium at a market price of $50.Owing to the spread of COVID-19, many people turn to buying frozen meat oncea week rather than fresh pork every day. As a result, the market price of fresh porkreduces to $30.a. With the aid of a pair of market-and-firm diagrams, illustrate how thiswould affect the equilibrium price and quantity in the fresh pork market andthe output of a typical butcher of fresh pork in the short-run.b. Suppose, for the situation in (a), the average cost of a typical butcher offresh pork is $40, which includes $15 on buying meat from suppliers, $12on paying rent, $8 on paying hourly wages on staff, and $5 on other costs.Explain whether a typical butcher should shut down in the short run.
- A market is in long-run equilibrium and firms inthis market have identical cost structures. Supposedemand in this market decreases. Describe whathappens to the market quantity as the market leavesand then returns to long-run equilibriumSuppose pretzel stands in New York City are aperfectly competitive market in long-run equilibrium.One day, the city starts imposing a $100 per monthtax on each stand. How does this policy affect thenumber of pretzels consumed in the short run andthe long run?a. down in the short run, no change in the long runb. up in the short run, no change in the long runc. no change in the short run, down in the long rund. no change in the short run, up in the long runA market is in long-run equilibrium and firms inthis market have identical cost structures. Supposedemand in this market decreases. Describe whathappens to the profit-maximizing output quantityfor individual firms as the market leaves and thenreturns to long-run equilibrium.
- Consider the competitive market for sports jackets. The following graph shows the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves for a typical firm in the industry. 72 16 AVC 16 24 40 QUANTITY (Thousards of jaats) For each price in the following tabie, use the graph to determine the number of jackets this firm would produce in arder to maximize its profie. Assume that when the price is exacty equal to the average variabie cost, the firm is indifferent between producing zero jackets and the proft-maximizing quandity. Also, indicate whether the fiem wil produce, shut down, or be indiferent between the two in the short run. Lastiy, determine whether e w make a prafit, suffer a loss, ar break even at each price. Price Quantity (Dollars per jacket) (Jackets) Produce or Shut Down? Profit or Loss? 4 12 36 48 60A new korean restaurant opens in a city. People are initially cautious about eating newfood items, until an influential health report warns consumers against korean foodsuggest that they decrease their consumption of Korean foods. As a result, demand forKorean cuisine decreases dramatically.Assuming that the market for Korean food is perfectly competitive, answer thequestions below.a. In the story above, what should have happened to the short-run economic loss of theKorean restaurant as a result of the health report?b. Assuming that demand remains low, what do you anticipate will happen to thenumber of korean restaurants in the city over the long run?c. Would you predict that the first korean restaurant would be able to still running inloss over the long run? Explain your answer.d. Using one graph of the market as a whole and one graph of a representative firm'scost curves, illustrate your answers to parts a - c. (Draw diagram of a, b and c and labelyour diagram).e. Local…A new korean restaurant opens in a city. People are initially cautious about eating newfood items, until an influential health report warns consumers against korean foodsuggest that they decrease their consumption of Korean foods. As a result, demand forKorean cuisine decreases dramatically.Assuming that the market for Korean food is perfectly competitive, answer thequestions below.a. In the story above, what should have happened to the short-run economic loss of theKorean restaurant as a result of the health report?
- a. John operates a firm producing t shirts. There are many such firms producingidentical products to John. What market structure is this? Is it possible for John tomake a profit in the long run? Illustrate using an appropriate diagram. b. John decides to innovate his business and begins printing t shirts with customercreated content. Will John be able to make a profit in the short run and the longrun? Explain using relevant diagrams and comment on the implied market c. Provide a strategy for John to make greater than normal profits in the long run. Isthis likely to be the case in the market for this good?er 11 i Suppose the market for corn is a purely competitive, constant-cost industry that is in long-run equilibrium. Now assume that an increase in consumer demand occurs. After all resulting adjustments have been completed, the new equilibrium price will be Multiple Choice OO O the same as the initial equilibrium price, but the new industry output will be greater than the original output. greater than the initial price, and the new industry output will be greater than the original output. less than the initial price, but the new industry output will be greater than the original output. the same as the initial equilibrium price, and the industry output will remain unchanged. 23 11,229 X OCT all Z AUse the information in the graphs below to answer the following questions SAb $/gal 25- S1 25 H MC ATC 20 20 15 15 P1 10 10 P2 5 4 6 8 10 2. Thousands of gal/week 1 3 Millions of gal/week What is the long-run equilibrium price in this market? Please enter your answers as whole numbers with and do not type out your answer in words (ie. $5 or $5.00 not "Five dollars"). How many gallons per week will the individual firm produce to maximize profits in equilibrium? Please enter your answers as whole numbers with no extra words (ie. 5000 not "5000 gallons/week"). What is the individual firm's long run economic profit?