Econ Micro (book Only)
6th Edition
ISBN: 9781337408066
Author: William A. McEachern
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 15, Problem 8P
To determine
Whether the economy growing more or less competitive and the ways to explain this trend.
Concept Introduction:
According to Shepherd, there were three sources that explained the increasing trend in the competitiveness of the U.S. Economy. They were:
1. Competition from Imports;
2. Deregulation; and
3. Antitrust Activity
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
Competitive Trends in the U.S. Economy) William Shepherd’s research of U.S. industries showed a clear trend in the competitiveness of the U.S. economy between 1958 and 2000. Is the economy growing more or less competitive, and how did Shepherd explain this trend?
Microeconomics
The table below represents a firm's profit for producing and selling candles. Assume that if a firm would have the same profit at two different levels of output, then the firm would choose the greater level of output. Assume that the only levels of output that the firm can produce are the levels of output given in the table. At what level of output does the firm maximize profits?
Quantity
Total Cost
Marginal Cost
Total Revenue
Marginal Revenue
0
$20
-
$0
-
15
$60
$2.67
$75
$5
30
$110
$3.33
$150
$5
45
$170
$4.00
$225
$5
60
$245
$5.00
$300
$5
75
$340
$6.33
$375
$5
[ Select ]
More Firms
Question 3
Fewer Firms
This market is in its long-run equilibrium
In the long run, do we expect more Tirms of ,
ver firms in the t-snirt market or doe
market appear in equilibrium. [ Select ]
Chapter 15 Solutions
Econ Micro (book Only)
Knowledge Booster
Similar questions
- Economists identify competitive markets as having these characteristics: • Identical products • price taker • low economic profits In preparation for the next module in which we will study the majority of markets that do not have these characteristics, based on your experience as a consumer what is a market for one good or service for which these characteristics do not hold? In your post, describe the good or service (not a brand name or company but the good or service itself) then explain why one or more of these characteristics is not true.arrow_forwardSolve the following microeconomics exercises (please include graphs and detailed explanations with all the mathematical operations that were used ) This is all the info that was proportioned. 1.-Perfect competition: The total revenue for a firm in a perfectly competitive market is the product of price and quantity (TR = P * Q). Total cost = Q^2+2Q+6 Demand eq:200-4P supply eq:4P Determine: a) Market equilibrium (graph) b) consumer surplus c) producer surplus 2-duopoly Total cost: Q^2+2Q+4 Demand eq:100-6P Determine: a) Cournot's equilibrium b) collusion case c) in what case Eq1 breaks the balance d) stackelberg equilibrium 3-monopoly Total cost :2Q^2+10Q+80 Q=656-4P Determine: a) optimal production b) equilibrium price c) monopoly profit d) irrecoverable lossarrow_forwardConsider the competitive market for steel. Assume that, regardless of how many firms are in the industry, every firm in the industry is identical and faces the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves shown on the following graph. (?) 100 90 80 70 60 50 40 ATC 30 20 MCO AVC 10 + 5 10 15 20 25 30 35 40 45 50 QUANTITY (Thousands of tons) The following diagram shows the market demand for steel. Use the orange points (square symbol) to plot the initial short-run industry supply curve when there are 20 firms in the market. (Hint: You can disregard the portion of the supply curve that corresponds to prices where there is no output since this is the industry supply curve.) Next, use the purple points (diamond symbol) to plot the short-run industry supply curve when there are 30 firms. Finally, use the green points (triangle symbol) to plot the short-run industry supply curve when there are 40 firms. 100 90 Supply (20 firms) 80 70 E 60 Supply (30…arrow_forward
- 6. Short-run perfectly competitive equilibrium Consider a perfectly competitive market for wheat in Dallas. There are 120 firms in the industry, each of which has the cost curves shown on the following graph: 100 90 80 60 ATC COST (Cents per bushel) 30 g 70 20 20 10 10 0 AVC MC + 0 5 10 15 20 25 30 35 40 45 50 QUANTITY OF OUTPUT (Thousands of bushels) The following graph shows the market demand for wheat. Use the orange points (square symbol) to plot the short-run industry supply curve for the wheat industry. Specifically, place an orange point at the lowest point of the supply curve and another orange point at the highest point of the supply curve. (Note: You can disregard the portion of the supply curve that corresponds to prices where there is no output, since this is the industry supply curve. Plot your points in the order in which you would like them connected. Line segments will connect the points automatically.) Then, place the black point (plus symbol) on the graph to indicate…arrow_forwardAssume that you have a representative farm producing wheat in a perfectly competitive market. The overall demand for wheat is made up of two components – domestic demand and foreign demand. Due to tariff disputes with the U.S., the European Union (EU) has urged its member nations to reduce their demand for U.S. agricultural products (including wheat). As a result, the foreign demand for U.S. wheat has declined by 20% this year. Using diagrams for a representative farm (i.e., wheat producer) and the market for wheat, analyze the impact of this decrease in foreign demand on the farm’s output and profit (loss) in the short-run and long run. Assume that the farm was in long-run equilibrium (i.e., earning zero economic profits) before the decrease in the foreign demand for wheat. Also, assume that the farm was facing a U-shaped AC curve and the typical upward-sloping MC curve. Provide a brief description of all the changes that occur and be sure to clearly denote those changes in your…arrow_forwardFill in the missing words: 1. If economic profits are being made in a perfectly competitive market, then firms will ________ the market. This will ________ the extra revenue firms earn for each unit of output soldarrow_forward
- Short-run and long-run effects of a shift in demand Suppose that the shrimp industry is in long-run equilibrium at a price of $5 per pound of shrimp and a quantity of 300 million pounds per year. Suppose that the Centers for Disease Control (CDC) announces that a chemical found in shrimp is causing bacterial infections to spread around the world. The CDC’s announcement will cause consumers to demand ______ shrimp at every price. In the short run, firms will respond by_____. Shift the demand curve, the supply curve, or both on the following diagram to illustrate these short-run effects of the CDC’s announcement. (TABLE 1) In the long run, some firms will respond by ______ until _______. (TABLE 2) The new equilibrium price and quantity suggest that the shape of the long-run supply curve in this industry is _____ in the long run. Shift the demand curve, the supply curve, or both on the following diagram to illustrate both the short-run effects of the…arrow_forwardeconomics From the information in the table, can you determine the short run supply curve? If so, what would it be? What would happen at the $45 price level in the long run, to profits, price, number of firms in the industry, assuming constant costs?arrow_forwardMarket Structures... Economists try to identify market structures in order to understand how firms and consumers behave. We characterize market structures by the number of buyers or sellers who are present, by the relative ease with which a new seller may enter the market, by the variation in the product from one supplier to the next, and by the amount of competition present. Perfect Competition Perfect competition is the most competitive market structure. A market with perfect competition has a large number of buyers and sellers. In this type of market, there are no barriers to entry or exit, which means a new seller will have a fairly easy time if he wants to start doing business. The product is homogeneous, in the sense that one bushel of wheat isn't really all that different from any other bushel of wheat. A perfectly competitive market is also characterized by the availability of perfect information, or free and equal access for everyone to information about the product, its…arrow_forward
- The number of firms in an industry is not always a good indicator of the extent to which that industry is competitive.” Do you agree with this statement?arrow_forwardWe expect that firms in perfectly competitive markets can earn higher economic profits in the short run but will only earn normal profit in the long run. Why do we expect perfectly competitive firms to be unable to earn high economic profit in the long run? The inability of perfectly competitive firms to earn high economic profit in the long run is dependent on there being low barriers to entry in perfectly competitive markets. Explain why this is the case. Why do firms remain in business if they cannot earn economic profit?arrow_forwardAfter the graphs: If there were 20 firms in the market, the short-run equilibrium price of copper would be $___ per pound. At that price, firms in this industry would ________ (earn a positive profit; shut down; earn zero profit; operate at a loss). Therefore, in the long-run, firms would ______ (enter; exit; neither enter nor exit) the copper market. Because you know that competitive firms earn ___ (positive; zero; negative) economic profit in the long-run, you know the long-run equilibrium price must be $___ per pound. From the graph, you can see that this means there will be ___ (10; 20; 30) firms operating in the copper industry in long-run equilibrium. True or False: Assuming implicit costs are positive, each of the firms operating in this industry in the long run earns negative accounting profit.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Microeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506893Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Economics: Private and Public Choice (MindTap Cou...EconomicsISBN:9781305506725Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Macroeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506756Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Microeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Economics: Private and Public Choice (MindTap Cou...
Economics
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Macroeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506756
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning