In perfect competition, what is the relationship between the demand for the firm's output and the market demand?In a perfectly competitive market, the market demand isO A. perfectly elastic; perfectly elasticO B.shown by a downward-sloping curve; perfectly elasticO C.shown by a downward-sloping curve; shown by a downward-sloping curveO D. perfectly elastic; shown by a downward-sloping curveand the demand faced by the individual firm isC

Perfect competition is an economic model of a market in which there are many buyers and sellers, all…

Answered: In a perfectly competitive market, the…

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter12: Firms In Perfectly Competitive Markets

Section: Chapter Questions

Problem 13P

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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?
Since a perfectly competitive firm can sell as much as it wishes at the market price, why can the firm not simply increase its profits by selling an extremely high quantity?
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: decrease
In a perfectly competitive market, when are economic profits possible? O Long-run O Economic profits are always zero, firms earn normal profit O Any time, it depends on the indivual firm O Short run
Suppose that bicycles are produced by a perfectly competitive, constant-cost industryWhich of the following will have a larger effect the long-run price of bicycles: a government program to advertise the health benefits of bicyclingor (2) a government program increases the demand for steel, an input in the manufacture of bicycles that is produced in an increasing cost industry ? O. Option 1: shifts the demand curve out and increases the price. O. Option 2: shifts the supply curve up and increases the price O. Option 2: it shifts the demand curve up and increases the quantity. O. Option 2: shifts the supply curve up and increases the quantity.
The graph shows a perfectly competitive market that was in a long-run equilibrium on demand curve Do, Due to a permanent change in demand to D, the price in the market will causing existing firms to which means that the market. O A. increase; earn a smaller economic profit; new firms will enter O B. decrease; earn a larger economic profit; new firms will enter OC. decrease; incur an economic loss; some firms will exit D. increase; earn a larger economic profit; some firms will exit O E. decrease; earn a smaller economic profit; new firms will enter
Which of the following is true about the long run in a competitive industry? There are more firms operating in the long run than in the short run because firms have more time to enter the industry. O Yearly profits are lower in the long run than in the short run. O The long run supply curve will tend to be more elastic than any short run supply curve. Yearly profits are higher in the long run than 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 profit-maximizing output quantityfor individual firms as the market leaves and thenreturns to long-run equilibrium.
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 A
Consider a competitive firm that is operating in the short run. The firm is maximizing profits and just breaking even. Assume it has to pay a monthly license fee of $100 and that the fee must be paid for as long as the firm operates. What should the firm do to maximize profits in the short run if the price of the license fee increases from $100 to $150? a. increase price Ob. increase output c. reduce output O d. not change output e. both a and c
5. "In perfect competition, firm's demand curve is:" * Oa Perfectly Elastic (horizontal) O b.Perfectly Inelastic (vertical) c. Unit Elastic. O d. Inelastic.
ull touch LTE 10:08 PM O O 37% O A docs.google.com What is the relationship between a perfectly competitive firm's marginal cost curve and its short-run supply curve? * The marginal cost curve of a perfectly competitive firm is the firm's short-run supply curve at the point where price is less than average variable cost. The marginal cost curve of a perfectly competitive firm is the firm's short-run supply curve at the point where price is equal to or greater than average variable cost. The marginal cost curve of a perfectly competitive firm is the firm's short-run supply curve at all points. The two are unrelated Page 4 of 5 Вack Next

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