Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN: 9781305506381
Author: James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher: Cengage Learning
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Chapter 10, Problem 5E
To determine
To Explain: The need to invest in purely competitive industries having razor thin equilibrium margins and entrants that erodes quasi-profits, considering that there is no exceptionally large volume.
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Many large corporations, such as General Motors and Apple, operate in markets that are not even close to perfectly competitive. But unlike the products these companies sell, shares of these firms’ common stock are bought and sold in what could be described as a perfectly competitive market. Based on the three conditions that make a market perfectly competitive, what characteristics of the purchase and sale of shares of stock of a large company like GM or Apple, are consistent with perfect competition?
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Chapter 10 Solutions
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
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