Homework Answers
Ques: In the long run in a perfectly competitive market firm there is free entry and exit of the firm in the industry. Hence Option A is correct.
Option B is wrong as no. of the firm is not fixed in a perfectly competitive market.
Option C is also wrong as there is no collusion of the firm as there is a homogenous product produced by every firm.
Ques: At point C firm's Marginal cost is higher than its Marginal revenue. Therefore, the firm will earn less profit and it should be producing less as point B is the point at which the firm's profit is maximized. Hence, Option C is correct.
Ques: Option C is correct as in case of a monopoly firm can able to get patent for their product if the product is unique and new. In that case, there is restricted entry to other firms. Hence, Option C is correct.
Option A is wrong as there is very less competitor in the market.
Option B is wrong as there are very large no. of buyers.
OPtion D is wrong as there is no high inout cost.
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We assume that in the long run in a perfectly competitive market: the firms can enter...
In the long run, all of the firms in a perfectly competitive industry will: exit the...
In the long run, all of the firms in a perfectly competitive industry will: exit the industry if price is greater than average total cost. produce at an output level at which average total cost equals marginal cost. earn an economic profit greater than zero. O produce an output level at which price is greater than average total cost. Which statement about the differences between monopoly and perfect competition is INCORRECT? A monopoly will charge a higher price and produce...
When a perfectly competitive market is in long-run equilibrium: O firms have an incentive to enter...
When a perfectly competitive market is in long-run equilibrium: O firms have an incentive to enter the market. O firms have an incentive to leave the market. O no firm has an incentive to enter or leave the market. When a firm operating in a perfectly competitive market is experiencing losses, it should continue operations if: O P< AVC O P=AVC O P > AVC If, in a perfectly competitive market, P= (a firm's) ATC, then the firm: earns an...
Suppose the market for wheat is perfectly competitive. Suppose further the long-run supply curve in this...
Suppose the market for wheat is perfectly competitive. Suppose further the long-run supply curve in this market is increasing. Explain briefly if and how each of the following varies as market quantity increases: i) The number of firms ii) Input prices iii) Long-run profits Suppose firms in a monopoly competitive market produce their profit-maximizing quantity, and their average total cost equals their marginal revenue. Should firm entry or exit in the long run?
Which of these statements regarding the differences between monopoly and a competitive market are true? Choose...
Which of these statements regarding the differences between monopoly and a competitive market are true? Choose one or more: A. There are more firms in a competitive market than in a monopoly. B. A monopolist can earn profits in the long run, but a firm in a perfectly competitive market cannot. C. A monopoly is a price maker, while a competitive firm is a price taker. D. A monopolist will produce less than the output produced in a perfectly competitive market.
are making an economic Today, firms in a perfectly competitive market run, firms will profit. In...
are making an economic Today, firms in a perfectly competitive market run, firms will profit. In the long firns in a perfectly competitive market are making the market until all firms in the market onomic e) exit, producing at the minimum point on their long-run average cost d) a) exit; covering only their total fixed costs b) enter, making zero economic profit enter, making zero normal profit an economic profit when new firms enter 46. The firms in a perfectly...
Which of the following is not a characteristic of the perfectly competitive market? A. Firms are...
Which of the following is not a characteristic of the perfectly competitive market? A. Firms are price setters B. Firms can easily enter and exit the market C. All firms produce identical products D. There are many buyers and sellers in the market
(c) Firms in the perfectly competitive bubble tea industry are earning economic profits because o...
(c) Firms in the perfectly competitive bubble tea industry are earning economic profits because of a surge in demand for bubble tea. Explain why in the long run, economic profits in this scenario are of less concern, from a public welfare perspective, than economic profits from monopoly. (5 marks)
Question 34 (1 point) Assume the market for wheat is perfectly competitive. At the current price...
Question 34 (1 point) Assume the market for wheat is perfectly competitive. At the current price of wheat wheat farmers are making a large economic loss. Which of the follow would we expect to happen in the long run? More firms produce wheat and the price of wheat rises Fewer firms produce wheat and the price of wheat rises Fewer firms produce wheat and the price of wheat falls More firms produce wheat and the price of wheat falls
Suppose competitive firms have identical costs of production. In the long run when firms are neither...
Suppose competitive firms have identical costs of production. In the long run when firms are neither entering nor exiting a competitive market, total revenue equals total cost such that a firm is making zero economic profits true false Firms that produce agricultural products are less likely to be in competitive markets than firms that produce cars. True False Competitive markets are characterized by a large number of buyers and sellers and free (easy) entry and exit by firms. True False
31 In perfectly competitive industries: A. the shont-run market supply curves are positively sloped в. long-rusniustry...
31 In perfectly competitive industries: A. the shont-run market supply curves are positively sloped в. long-rusniustry supply curve,are positively sloped. C. the short-run D. All of the above E. Only B and C are correct market supply curves are more clastic than the long-run industry supply curvers s3. Assame a perfectly-competitive, increasing-cost industry composed of identical firms is initially in long-run equilibrium. Given a decrease in demand, in the short ran: equilbrium price decreases, equilibrium output increases, the output of...
In the long run, all of the firms in a perfectly competitive industry will: exit the industry if price is greater than average total cost. produce at an output level at which average total cost equals marginal cost. earn an economic profit greater than zero. O produce an output level at which price is greater than average total cost. Which statement about the differences between monopoly and perfect competition is INCORRECT? A monopoly will charge a higher price and produce...
When a perfectly competitive market is in long-run equilibrium: O firms have an incentive to enter the market. O firms have an incentive to leave the market. O no firm has an incentive to enter or leave the market. When a firm operating in a perfectly competitive market is experiencing losses, it should continue operations if: O P< AVC O P=AVC O P > AVC If, in a perfectly competitive market, P= (a firm's) ATC, then the firm: earns an...
Which of these statements regarding the differences between monopoly and a competitive market are true? Choose one or more: A. There are more firms in a competitive market than in a monopoly. B. A monopolist can earn profits in the long run, but a firm in a perfectly competitive market cannot. C. A monopoly is a price maker, while a competitive firm is a price taker. D. A monopolist will produce less than the output produced in a perfectly competitive market.
are making an economic Today, firms in a perfectly competitive market run, firms will profit. In the long firns in a perfectly competitive market are making the market until all firms in the market onomic e) exit, producing at the minimum point on their long-run average cost d) a) exit; covering only their total fixed costs b) enter, making zero economic profit enter, making zero normal profit an economic profit when new firms enter 46. The firms in a perfectly...
Question 34 (1 point) Assume the market for wheat is perfectly competitive. At the current price of wheat wheat farmers are making a large economic loss. Which of the follow would we expect to happen in the long run? More firms produce wheat and the price of wheat rises Fewer firms produce wheat and the price of wheat rises Fewer firms produce wheat and the price of wheat falls More firms produce wheat and the price of wheat falls
31 In perfectly competitive industries: A. the shont-run market supply curves are positively sloped в. long-rusniustry supply curve,are positively sloped. C. the short-run D. All of the above E. Only B and C are correct market supply curves are more clastic than the long-run industry supply curvers s3. Assame a perfectly-competitive, increasing-cost industry composed of identical firms is initially in long-run equilibrium. Given a decrease in demand, in the short ran: equilbrium price decreases, equilibrium output increases, the output of...
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