A perfectly competitive firm is considered to be more generous in terms of price and quantity of output in comparison to firm belonged to monopoly and monopolistic markets. a. Demonstrate a simplified graph to show that a perfectly competitive firm incurring loss, but has reached the minimum condition to keep operating in the market. b. Does the firm operate in the short or long run based on your answer to question (a). Why?

A perfectly competitive firm is considered to be more generous in terms of price and quantity of output in comparison to firm belonged to monopoly and monopolistic markets. a. Demonstrate a simplified graph to show that a perfectly competitive firm incurring loss, but has reached the minimum condition to keep operating in the market. b. Does the firm operate in the short or long run based on your answer to question (a). Why?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Q3. Which model(s) lead to zero profit in the long run (select all that apply) a. Stackelberg Competition b. Cournot Competition c. Monopolistic Competition d. Bertrand Competition with Identical Goods
Would a competitive firm ever engage in advertising? Explain.
Examine the relationship between Marginal cost and average cost for firm in the short run. Why the Monopoly firm is considered inefficient compare to perfect competition? Write short notes on a) Normal profit for perfectly competitive firm b) Economic loss for perfectly competitive firm. Note: Show Graph Using Ms word
Research the difference between pure competition and monopoly pricing. Compare and contrast the differences between the two and then explain which you would prefer if you were a shipper (you’re paying the bill) and why? Also, consider your answer if you were the carrier (you’re getting paid) and explain how you might feel differently and why?
The optimal level of production for any company is the level of production that either maximizes profits or minimizes losses. How does one determine the optimal level of production for any business? Explain. Explain why a company would shut down in the short run. Explain how a company could choose to get bigger, yet lower their average costs? What are the major characteristics of a firm competing under conditions of perfect competition? What are the major characteristics of a firm competing under conditions of monopoly? How does a demand curve differ in perfect competition from a demand curve in a monopoly? Name an example of a local monopoly?
What are the key characteristics of perfect competition? How does monopoly differ from perfect competition? Which market achieves economic efficiency? Write an example of perfect competition, and one for monopoly.
George Stigler, "Perfect Competition, Historically Contemplated," Journal of Political Economy,Vol. 55, No. 1, (February 1957), pp. 1-17. Despite the fact that few firms sell identical products in markets where there are no barriers to entry, economists believe that the model of perfect competition is important because A. economists prefer studying theoretical markets instead of actual markets. B. all markets eventually become perfectly competitive. C. it is a benchmark—a market with the maximum possible competition—that economists use to evaluate actual markets that are not perfectly competitive. D. this is the type of market that our business laws protect and promote.
The makers of Tylenol pain reliever do a lot of advertising and have very loyal customers. In contrast, the makers of generic acetaminophen do no advertising, and their customers shop only for the lowest price. Assume that the marginal costs of Tylenol and generic acetaminophen are the same and constant. a) Draw a diagram showing Tylenol's demand, marginal revenue and marginal cost curves. Label Tylenol's price and mark-up over marginal cost. b) Repeat part (a) for a producer of generic acetaminophen. How do the diagrams differ? Which company has the bigger mark-up? Explain. c) How might barriers to entry influence the behaviour of the makers of Tylenol? d) What factors would affect the extent to which the makers of Tylenol could engage in predatory or destroyer pricing to force out competitors in this market?
What does it mean there is a low barrier to entry(low entry barriers) to perfect competition? what is meant by short-run, and long-run in market structure?
QUESTION 2: Consider a competitive market. There are X number of firms in this market. Every firm is facing the following set up: a. How does the number of firms in the industry, affect each firm's demand curve? Why? b. What will be the production in this market? What price will the companies charge? How much profit will firms make? c. What is the minimum number of firms in the market so that everyone is making losses? d. How many firms will exist in this market in the long-run?
In which market structure would you place each of the following products: monopoly, monopolistic competition, or perfect competition? d. Restaurants in a large city e. Tomato f. Air travel from any one airport.
Short Answer 1 Fill in the table below. Number of firms Type of product Influence over price Barriers to entry into markets Perfect competition Market structure Monopolistic competition Oligopoly Monopoly Short Answer 2 In the long run, do perfectly competitive markets satisify technical efficiency, allocative efficiency, and economic efficiency? Explan your reasoning for each.