why is the market for used cars not considered to be perfectly competitive? a. the good...
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why
is the market for used cars not considered to be perfectly
competitive?
a. the good...
Consider the markets for three products below. Indicate which characteristics of a competitive market are met by these markets.
Consider the markets for three products below. Indicate which characteristics of a competitive market are met by these markets. Instructions: You may select more than one answer. Click the box with a check mark for correct answers and click to empty the box for the wrong answers. Market: gasoline large number of buyers standardized good full Information no transaction cost participants are price takers Market: barbershop haircuts large number of buyers standardized good full information no transaction cost participants are price takers
In a purely competitive market, firms are considered price takers. Why is this important? Which characteristic...
In a purely competitive market, firms are considered price takers. Why is this important? Which characteristic of the purely competitive market makes firms price takers?
1. Provide an example of a perfectly competitive market, or at least a market that gets...
1. Provide an example of a perfectly competitive market, or at least a market that gets a close as possible in your opinion. Evaluate your market against the four characteristics of perfect competition (Many small buyers and sellers, identical products, complete information, free entry and exit) to explain why you think it fits this market structure. In your opinion, have the sellers in this market accepted their position as price-takers or do they continue to try to shift the market...
Consider the market for used cars in which ? of the cars are good cars (peaches)...
Consider the market for used cars in which ? of the cars are good cars (peaches) and (1 − ?) are bad cars (lemons); buyers think ? of the cars for sale are peaches and (1 − ?) are lemons (? and ? are fractions). Sellers’ valuations of peaches and lemons are $20 and $10, respectively; buyers’ valuations of peaches and lemons are $50 and $15, respectively. All sellers and buyers are risk neutral. This information is common knowledge. (a)...
Consider a used-car market with asymmetric information. The owners of used cars know what their vehicles...
Consider a used-car market with asymmetric information. The owners of used cars know what their vehicles are worth but have no way of credibly demonstrating those values to potential buyers. Thus, potential buyers must always worry that the used car they are being offered may be a low-quality "lemon." Instructions: Enter your answers as whole numbers. a. Suppose that there are equal numbers of good and bad used cars in the market and that good used cars are worth $13,000 while bad...
The perfectly competitive market structure is considered to be economically efficient. Discuss why this is the...
The perfectly competitive market structure is considered to be economically efficient. Discuss why this is the case.
Assume that the UK car market is perfectly competitive and that cars are a homogenous good....
Assume that the UK car market is perfectly competitive and that cars are a homogenous good. The inverse demand curve for cars is given by PD(Q) = 36−Q, where quantities are measured in millions of units, while prices are measured in thousands of dollars. The supply of cars in the US is given by PS(Q) = 6 + 2Q. Cars are produced also in other countries and in this exercise we will assume that the US is “small” as far...
Suppose the market for used cars has 75 sellers with cars in good condition and 25 sellers with cars in bad condition (...
Suppose the market for used cars has 75 sellers with cars in
good condition and 25 sellers with cars in bad condition
("lemons").
5. Suppose the market for used cars has 75 sellers with cars in good condition and 25 sellers with cars in bad condition ("lemons"). There are an unlimited number of potential buyers. Buyers are willing to pay $10,000 for cars in good condition while the sellers value these cars at $7,000. Buyers are willing to pay $300...
A few sellers may behave as if they operate in a perfectly competitive market if the...
A few sellers may behave as if they operate in a perfectly competitive market if the market demand is: Select one: a. highly inelastic b. very elastic. c. unitary elastic d. composed of many small buyers.
? To maximize economic profit, a perfectly competitive firem good below market price å will sell...
? To maximize economic profit, a perfectly competitive firem good below market price å will sell its b. urie sell its good at market price C. None d. will sell its good above the market price
1. Provide an example of a perfectly competitive market, or at least a market that gets a close as possible in your opinion. Evaluate your market against the four characteristics of perfect competition (Many small buyers and sellers, identical products, complete information, free entry and exit) to explain why you think it fits this market structure. In your opinion, have the sellers in this market accepted their position as price-takers or do they continue to try to shift the market...
Consider a used-car market with asymmetric information. The owners of used cars know what their vehicles are worth but have no way of credibly demonstrating those values to potential buyers. Thus, potential buyers must always worry that the used car they are being offered may be a low-quality "lemon." Instructions: Enter your answers as whole numbers. a. Suppose that there are equal numbers of good and bad used cars in the market and that good used cars are worth $13,000 while bad...
Suppose the market for used cars has 75 sellers with cars in
good condition and 25 sellers with cars in bad condition
("lemons").
5. Suppose the market for used cars has 75 sellers with cars in good condition and 25 sellers with cars in bad condition ("lemons"). There are an unlimited number of potential buyers. Buyers are willing to pay $10,000 for cars in good condition while the sellers value these cars at $7,000. Buyers are willing to pay $300...
A few sellers may behave as if they operate in a perfectly competitive market if the market demand is: Select one: a. highly inelastic b. very elastic. c. unitary elastic d. composed of many small buyers.
? To maximize economic profit, a perfectly competitive firem good below market price å will sell its b. urie sell its good at market price C. None d. will sell its good above the market price
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