Micro Economics For Today
10th Edition
ISBN: 9781337613064
Author: Tucker, Irvin B.
Publisher: Cengage,
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Question
Chapter 8, Problem 10SQ
To determine
The price, marginal cost, and marginal revenue under
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Students have asked these similar questions
Under perfect competition, which of the following are the same (equal) at all levels of output?
a. Price and marginal cost
b. Price and marginal revenue
c. Marginal cost and Marginal revenue
d. All of the above answers are correct.
You read in a business magazine that farmers are reaping high profits. With the theory of perfect competition in mind, what do you expect to happen over time (in the long run) to each of the following?
a. The prices of agricultural products
how will this affect the market equilibrium price of the agricultural products? Will it remain the same, increase or decrease?
Why do sellers in perfectly competitive industries have no market power?
a. There are large number of buyers and sellers.
b. They all sell the same/identical goods.
c. There are perfect substitutes available for the goods sold by any particular seller because they all sell identical goods.
d. All of the above.
e. None of the above.
Chapter 8 Solutions
Micro Economics For Today
Ch. 8.5 - Prob. 1YTECh. 8.5 - Prob. 2YTECh. 8 - Prob. 1SQPCh. 8 - Prob. 2SQPCh. 8 - Prob. 3SQPCh. 8 - Prob. 4SQPCh. 8 - Prob. 5SQPCh. 8 - Prob. 6SQPCh. 8 - Prob. 7SQPCh. 8 - Prob. 8SQP
Ch. 8 - Prob. 9SQPCh. 8 - Prob. 10SQPCh. 8 - Prob. 11SQPCh. 8 - Prob. 12SQPCh. 8 - Prob. 1SQCh. 8 - Prob. 2SQCh. 8 - Prob. 3SQCh. 8 - Prob. 4SQCh. 8 - Prob. 5SQCh. 8 - Prob. 6SQCh. 8 - Prob. 7SQCh. 8 - Prob. 8SQCh. 8 - Prob. 9SQCh. 8 - Prob. 10SQCh. 8 - Prob. 11SQCh. 8 - Prob. 12SQCh. 8 - Prob. 13SQCh. 8 - Prob. 14SQCh. 8 - Prob. 15SQCh. 8 - Prob. 16SQCh. 8 - Prob. 17SQCh. 8 - Prob. 18SQCh. 8 - Prob. 19SQCh. 8 - Prob. 20SQ
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- Justin’s Jeans sells in a perfectly competitive market with a downward-sloping demand curve and an upward-sloping supply curve. The market price is $33 per unit, and the total fixed cost is $30.(a) Identify the profit-maximizing quantity. Explain using marginal analysis. (b) Calculate the economic profit at the profit-maximizing quantity you identified in part (a). Show your work.(c) Calculate the average fixed cost of producing 6 units. Show your work.(d) Based on your answer to part (b), will the number of firms in the industry increase, decrease, or stay the same in the long run? Explain.(e) Based on your answer to part (b), will the market price increase, decrease, or stay the same in the long run? Explain.(f) The income elasticity of demand for Good M is 1.4, and the cross-price elasticity of demand for jeans with respect to the price of Good M is −0.75. Based on your answer to part (e), what will happen to the demand for jeans? Explain.(g) Now assume that the market in which…arrow_forwardGeorge 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.arrow_forwardA Perfect Competition has [ Select ] producer(s), products are [ Select ] , it is [Select ] to enter the market, and producers in a perfect competition have [ Select ] control over prices.arrow_forward
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- What are some characteristics of perfect competition? Is the Banana market a perfect competition? When you are buying bananas, what is your decision making process? Do you have any favorite brand of banana? How can companies in the market compete? Please name some other examples of perfect competition?arrow_forwardAssume the market for coffee mugs is perfectly competitive. Firms in the market are producing output, but are currently making economic losses. a. How does the price of coffee mugs compare to the average total cost, the average variable cost, and the marginal cost of producing coffee mugs? b. Draw two graphs, side by side, illustrating the present situation for the typical firm and in the market.arrow_forwardWhy do sellers in perfectly competitive industries have no market power? choose from answers below a. There are large number of buyers and sellers. b. They all sell the same/identical goods. c. There are perfect substitutes available for the goods sold by any particular seller because they all sell identical goods. d. All of the above. e. None of the above.arrow_forward
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