Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
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Chapter 8, Problem 33CTQ
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Has any particular firm in the perfectly competitive market found a way to differentiate or distinguish itself from its competitors? If so, what did the firm do? If not, what prevents the firm from differentiating itself?
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The market for paperback detective novels is perfectly competitive. We have two types of book publishers in the market- Small Press and Large Press.
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Chapter 8 Solutions
Principles of Economics 2e
Ch. 8 - Firms ill a perfectly competitive market are said...Ch. 8 - Would independent trucking fit the characteristics...Ch. 8 - Look at Table 8.13. What would happen to the films...Ch. 8 - Suppose that the market price increases to 6, as...Ch. 8 - Explain in words why a profit-maximizing film will...Ch. 8 - A firms marginal cost curve above the average...Ch. 8 - If new technology in a perfectly competitive...Ch. 8 - A market in perfect competition is in long-run...Ch. 8 - Productive efficiency and allocative efficiency...Ch. 8 - Explain how the profit-maximizing rule of setting...
Ch. 8 - A single firm in a perfectly competitive market is...Ch. 8 - What are the four basic assumptions of perfect...Ch. 8 - What is a price taker firm?Ch. 8 - How does a perfectly competitive firm decide what...Ch. 8 - What prevents a perfectly competitive firm from...Ch. 8 - How does a perfectly competitive film calculate...Ch. 8 - Briefly explain the reason for the shape of a...Ch. 8 - What two rules does a perfectly competitive firm...Ch. 8 - How does the average cost curve help to show...Ch. 8 - What two lines on a cost curve diagram intersect...Ch. 8 - Should a firm shut down immediately if it is...Ch. 8 - How does the average variable cost curve help a...Ch. 8 - What two lines on a cost curve diagram intersect...Ch. 8 - Why does entry occur?Ch. 8 - Why does exit occur?Ch. 8 - Do entry and exit occur in the short run, the long...Ch. 8 - What price will a perfectly competitive firm end...Ch. 8 - Will a perfectly competitive market display...Ch. 8 - Will a perfectly competitive market display...Ch. 8 - Finding a life partner is a complicated process...Ch. 8 - Can you name five examples of perfectly...Ch. 8 - Your company operates in a perfectly competitive...Ch. 8 - Since a perfectly competitive firm can sell as...Ch. 8 - Many films in the United States file for...Ch. 8 - Why will profits for films in a perfectly...Ch. 8 - Why will losses for firms in a perfectly...Ch. 8 - Assuming that the market for cigarettes is in...Ch. 8 - In the argument for why perfect competition is...Ch. 8 - The AAA Aquarium Co. sells aquariums for 20 each....Ch. 8 - Perfectly competitive firm Doggies Paradise Inc....Ch. 8 - A computer company produces affordable,...
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- At the profit-maximizing output level, what will be the relationship between the perfectly competitive firm's Price and Marginal Cost?arrow_forwardWhy can't a perfectly competitive firm charge a price premium (sell at a higher price) relative to other firms in the industry (what would happen if a firm attempted to do so)? What is the term given to perfectly competitive firms since they must sell at the market equilibrium price?arrow_forwardAt what output does a perfectly competitive firm maximize its profit? when marginal cost equals average fixed cost when average total cost equals average revenue when total revenue equals total variable cost when marginal cost equals marginal revenuearrow_forward
- Can a perfectly competitive firm set its own market price?arrow_forwardIn the long run, perfectly competitive firms make zero economic profit. If this is the case, why does the firm even bother producing? Why not exit the market completely?arrow_forwardIf a firm in a perfectly competitive market maximizes short-run profits by producing some quantity of output, which of the following must be true at that level of output?arrow_forward
- Consider the perfectly competitive market for pineapples, which is in long-run equilibrium. Now income increases (we may assume that pineapples are a normal good). As a result, we would expect that The short-run profits stay the same The long-run profit for each firm increases. The short-run quantity for each firm increases The long-run quantity produced by each firm increasesarrow_forwardSuppose the market for peaches is perfectly competitive. The short-run average total cost and marginal cost of growing peaches for an individual grower are illustrated in the figure to the right. Assume that the market price for peaches is $30.00 per box. What is the profit-maximizing quantity for peach growers to produce? boxes. (Enter your response as an integer.) At this level of output, profit will be $. (Enter your response rounded to the nearest dollar.) Peach growers will earn positive economic profit in the short run at any market price above $ per box. (Enter your response rounded to one decimal place.) Price (dollars per box) 40- 36- 32- 28- 24 20 16- 12- 8 4- 10 MC 20 30 40 50 60 70 80 Output (boxes of peaches per day) ▬▬ ATC 90 100 Qarrow_forwardRefer to the graph of a perfectly competitive market. How many units will the firm choose to sell, and at what price? In the short term, what will be the total revenue, total cost, and total profit of the firm? If at some point in the future the market price fell below $6 (for example where Point A is) what would the firm do?arrow_forward
- You witnessed new firms entering a competitive market. What can you infer for the existing firms in that market?arrow_forwardInitially, all firms in a perfectly competitive market are in long-run equilibrium. Assume that the market demand for the product produced by the firms in the market suddenly rises. Suppose the following graph shows the marginal revenue (MR) and marginal cost (MC) curves of a firm in this market at its initial long-run equilibrium, with an equilibrium price of P₁ and a profit-maximizing quantity of output of Q₁. Show the short-run effect of the increase in market demand on this firm by shifting the marginal revenue curve, the marginal cost curve, or both on the following graph. PRICE AND COST 2 MC Q₂ QUANTITY In the short run, the firm will respond by producing In the long run, some firms will respond by PRICE MR QUANTITY Supply MR Demand O Shift the demand curve, the supply curve, or both on the following graph to illustrate both the short-run effects and the new long-run equilibrium after firms finish adjusting to the increase in market demand. MC the industry. Demand goods and…arrow_forwardAssume that a firm in a competitive market faces the following cost information. If the market price for this firm's product is $40, calculate the profit maximizing level of output for this firm using marginal analysis. a.Approximately where do you think the price will end up in this market over the long run? b.Last, instead of assuming a given price, how would you go about finding the equilibrium price if you were given information on market demand?arrow_forward
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