QUESTION 9 In a perfectly competitive market there are O a. few buyers and few sellers. O b.many buyers and many sellers. c. many buyers and few sellers. O O d. few buyers and many sellers.
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- If new technology in a perfectly competitive market brings about a substantial reduction in costs of production, how will this affect the market?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?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 runSuppose 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 runPrice and cost (dollars per ride) The graph shows the market for the two zipline firms that operate in a resort city. If the firms decide to compete, then together they will produce rides at a price of per ride. 60 O A. 400: $30 MC O B. 400; $50 50 O C. between 200 and 400: between $30 and $50 40 O D. 200: $30 O E. 200; $50 30 20 'D 10 MR 100 200 300 400 500 Quantity (number of rides)
- For a profit-maximizing price-taker firm, a reduction in the price of a good will cause the marginal revenue for that firm to and the quantity the firm produces to a. Fall; Fall O b. Rise; Fall O c. Rise; Rise O d. Fall; RiseSean's Fire Engines is the sole seller of fire engines in the fictional country of Pyrotania. Initially, Sean produced five fire engines, but he has decided to increase production to six fire engines. The following graph shows the demand curve Sean faces. As you can see, to sell the additional engine, Sean must lower his price from $160,000 to $120,000 per fire engine. Note that while Sean gains revenue from the additional engine he sells, he also loses revenue from the initial five engines because he sells them all at the lower price. Use the purple rectangle (diamond symbols) to shade the area representing the revenue lost from the initial five engines by selling at $120,000 rather than $160,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine at $120,000. (? 200 180 Demand Revenue Lost 160 * 140 120 Revenue Gained 100 80 60 (Thousands of dollars per fire engine)3. The components of marginal revenue Nick's Fire Engines is the sole seller of fire engines in the fictional country of Pyrotania. Initially, Nick produced eight fire engines, but he has decided to increase production to nine fire engines. The following graph shows the demand curve Nick faces. As you can see, to sell the additional engine, Nick must lower his price from $80,000 to $40,000 per fire engine. Note that although Nick gains revenue from the additional engine he sells, he also loses revenue from the initial eight engines because he sells them all at the lower price. Use the purple rectangle (diamond symbols) to shade the area representing the revenue lost from the initial eight engines by selling at $40,000 rather than $80,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine at $40,000. PRICE (Thousands of dollars per fire engine) 200 180 160 140 120 100 Nick 0 1 2 4 Y 5. 6 QUANTITY (Fire…
- What are the three conditions for a market to be perfectly competitive? For a market to be perfectly competitive, there must be O A. many buyers and a small number of firms that compete, selling identical products, and barriers to new firms entering the market. O B. many buyers and one seller, with the firm producing a product that has no close substitutes, and barriers to new firms entering the market. OC. many buyers and a few sellers, with all firms selling identical products, and no barriers to new firms entering the market. O D. many buyers and sellers, with all firms selling identical products, and no barriers to new firms entering the market. O E. many buyers and sellers, with firms selling similar but not identical products, with low barriers new firms entering the market.In perfect competition, a firm maximizes profit in the short run by deciding Select one: O a. whether or not to enter a market O b. how much output to produce O c. what price to charge O d. how much capital to useWhich 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.
