Question

1. Assumption for a Perfectly competitive firm include a Homogeneous product a several sellers and [ Select ] ["unique", "Many Many", "few few", "3-4"] buyers easy entry and exit.

2. Perfectly competitive firms are known as Price Takers because they [ Select ] ["have pricing power", "have minimal pricing power", "have very little pricing power", "have no pricing power"] which means they[ Select ] ["should advertise less", "have no incentive", "ought to advertise", "must advertise more"] to advertise

3. The perfectly competitive firm's supply curve is the [ Select ] ["doesn't exist", "is the Marginal Cost curve equal to and above the price/demand line", "upward sloping supply curve equal to the demand curve", "is downward sloping"]      

This means that as the market price rises the firm will [ Select ] ["increase", "halt", "decrease"] production

and as the market price falls the firm will[ Select ] ["halt", "decrease", "increase"] production

4.

What is ATC for each level of output listed in the table? Output $TC $ATC 25,000 $50,000 $ $2 50,000 $70,000 $ 1.40 75,000 $75,000 $ 1 100,000 $80,000 $0.80 b. Suppose that for each 25,000-bottle-per-day increase in production above 100,000 bottles per day, TC increases by $5,000 (so that, for instance, 125,000 bottles per day would generate total costs of $85,000 and 150,000 bottles per day would generate total costs of $90,000). Is this a decreasing-cost industry? yes c. Suppose that the price of a bottle of vitamins is $1.33 in the Long Run and that at that price the total quantity demanded by consumers is 80,000 bottles. How many firms do you expect to be in this industry? 1 firm(s). d. Suppose that, instead, still in the long run the market quantity demanded at a price of $1.33 is only 75,000. How many firms do you expect there to be in this industry? 1 firm(s). e. Review your answers to parts b, c and d. Does the level of demand determine this industry's market structure? no f. What does determines your answers in parts c& d? (Select]

[ Select ] ["existence of profits", "lack of profits", "demand", "the prices"]      

Answer 1

(Question 1)

Assumption for a Perfectly competitive firm includes: Homogeneous product, Several sellers and Many Many buyers, Easy entry and exit.

(Question 2)

Perfectly competitive firms are known as Price Takers because they have no pricing power, which means they have no incentive to advertise.

(Question 3)

The perfectly competitive firm's supply curve is the Marginal Cost curve equal to and above the price/demand line. This means that as the market price rises, the firm will increase production, and as the market price falls, the firm will decrease production.

NOTE: As HOMEWORKLIB Answering Policy, 1st 3 questions have been answered.