Explain the equilibrium conditions of a market structure with large number of firms selling the homogenous...
Explain the equilibrium conditions of a market structure with large number of firms selling the homogenous product? Why the firms in this market face a horizontal demand curve?
Homework Answers
A large number of firms, a homogeneous product, freedom of entry
and exit, perfect information and perfect resource mobility. The
model of perfect competition is based on the following
assumptions:
1) There is a large number of firms.
2) All firms produce identical, or homogeneous products
3) There is perfect (complete) information.
4) There is perfect resource mobility.
The demand curve for the perfect competitor is horizontal because the market dictates each firm's price.
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Explain the equilibrium conditions of a market structure with
large number of firms selling the homogenous...
Problem 3- Bertrand Consider 2 firms selling a homogenous product with market demand as below: Q...
Problem 3- Bertrand Consider 2 firms selling a homogenous product with market demand as below: Q = 110-P Firm 1's marginal cost is 10 per unit, firm 2's is 5 per unit. The firms compete on price, not quantity. What is the equilibrium production of each firm, and what is each firm's profit?
What is the consequence of a firm in a competitive market selling a homogenous product? The...
What is the consequence of a firm in a competitive market selling a homogenous product? The firms capture some market power. The product sold by one firm is a perfect substitute for the products sold by other firms in the same industry. All the firms in the industry are the same size. The product sold by one firm is a perfect complement for the products sold by other firms in the industry. Firms in the industry can produce the same...
Question 22 (1 point) In a Bertrand model with identical firms and a homogenous product, price...
Question 22 (1 point) In a Bertrand model with identical firms and a homogenous product, price will increase in response to a decrease in the number of firms. a firm's best-response function is identical to its rival. with a homogenous product, market power is a function of the number of firms with identical firms and a homogenous product, price will increase in response to an increase in marginal cost O equilibrium price is equal to the competitive price. Question 21...
(a) Consider a homogenous product market, with firms indexed by i. Suppose that the total cost to...
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thankss
(a) Consider a homogenous product market, with firms indexed by i. Suppose that the total cost to firi of producing qi is given by Cigi)- qi + q.. The market clearing price (inverse demand) is P(Q) α-Q, if Q 1 and Q-Σ%- (a.1) Suppose firms are price takers. Find the long-run firm and mar ket supply. Characterize the perfectly competitive equilibrium price and uantity in this market.
(a) Consider a homogenous product...
Consider a competitive industry with a large number of firms, all of which have the cost...
Consider a competitive industry with a large number of firms, all of which have the cost function c(y) = y 2 + 1 for y > 0 and c(0) = 0. Note that the marginal cost for this cost function is MC = 2y for y > 0. Suppose that initially the demand curve for this industry is given by D(p) = 84 − p. Note that the output of a firm does not have to be an integer number,...
The market for coffee is perfectly competitive, has a large number of identical firms, and is...
The market for coffee is perfectly competitive, has a large number of identical firms, and is in LONG-RUN equilibrium. The market demand curve is downward sloping, and the cost schedules have their usual shapes. Market price for a unit of coffee is $10. There is a decrease in the price of tea, a substitute for coffee. [A] In the SHORT RUN, in appropriate diagrams, show what happens to price, industry output, and the output and profits of a representative firm...
Which is not a characteristic of a competitive market? a large number of firms offering similar...
Which is not a characteristic of a competitive market? a large number of firms offering similar products O Firms have some degree of control over prices. O no product differentiation between firms little or no barriers to entry Question 2 of 21 > Classify each market characteristic as being a trait of competitive markets, monopolistically competitive markets, or both market structures. Competitive Markets Monopolistically Competitive Markets Both Market Structures Answer Bank No one buyer or seller can control prices Few,...
EC202-5-FY 10 9Answer both parts of this question. (a) Firm A and Firm B produce a homogenous good and are Cournot duopolists. The firms face an inverse market demand curve given by P 10-Q. where...
EC202-5-FY 10 9Answer both parts of this question. (a) Firm A and Firm B produce a homogenous good and are Cournot duopolists. The firms face an inverse market demand curve given by P 10-Q. where P is the market price and Q is the market quantity demanded. The marginal and average cost of each firm is 4 i. 10 marks] Show that if the firms compete as Cournot duopolists that the total in- dustry output is 4 and that if...
An industry consists of two Cournot firms selling a homogeneous product with a market demand curve...
An industry consists of two Cournot firms selling a homogeneous product with a market demand curve given by P=100-Q1-Q2. Each firm has a marginal cost of $10 per unit. (a) Find the Cournot equilibrium quantities and prices. (b) What is the Bertrand equilibrium price in this market? (c) Find the quantities and price that would prevail if the firms acted as if they were a monopolist (I.e. find the collusive outcome) and then find the equilibrium price and quantity that...
10. Two firms produce a homogenous product. The industry demand curve is: P-40-40 And the marginal...
10. Two firms produce a homogenous product. The industry demand curve is: P-40-40 And the marginal cost for each firm is MC-4 What is the equilibrium P, Q for each firm in a Bertrand model? What is the equilibrium P, Q for each firm in a Cournot model? a. b.
Problem 3- Bertrand Consider 2 firms selling a homogenous product with market demand as below: Q = 110-P Firm 1's marginal cost is 10 per unit, firm 2's is 5 per unit. The firms compete on price, not quantity. What is the equilibrium production of each firm, and what is each firm's profit?
Question 22 (1 point) In a Bertrand model with identical firms and a homogenous product, price will increase in response to a decrease in the number of firms. a firm's best-response function is identical to its rival. with a homogenous product, market power is a function of the number of firms with identical firms and a homogenous product, price will increase in response to an increase in marginal cost O equilibrium price is equal to the competitive price. Question 21...
hlp me to figure out this :)
thankss
(a) Consider a homogenous product market, with firms indexed by i. Suppose that the total cost to firi of producing qi is given by Cigi)- qi + q.. The market clearing price (inverse demand) is P(Q) α-Q, if Q 1 and Q-Σ%- (a.1) Suppose firms are price takers. Find the long-run firm and mar ket supply. Characterize the perfectly competitive equilibrium price and uantity in this market.
(a) Consider a homogenous product...
The market for coffee is perfectly competitive, has a large number of identical firms, and is in LONG-RUN equilibrium. The market demand curve is downward sloping, and the cost schedules have their usual shapes. Market price for a unit of coffee is $10. There is a decrease in the price of tea, a substitute for coffee. [A] In the SHORT RUN, in appropriate diagrams, show what happens to price, industry output, and the output and profits of a representative firm...
Which is not a characteristic of a competitive market? a large number of firms offering similar products O Firms have some degree of control over prices. O no product differentiation between firms little or no barriers to entry Question 2 of 21 > Classify each market characteristic as being a trait of competitive markets, monopolistically competitive markets, or both market structures. Competitive Markets Monopolistically Competitive Markets Both Market Structures Answer Bank No one buyer or seller can control prices Few,...
EC202-5-FY 10 9Answer both parts of this question. (a) Firm A and Firm B produce a homogenous good and are Cournot duopolists. The firms face an inverse market demand curve given by P 10-Q. where P is the market price and Q is the market quantity demanded. The marginal and average cost of each firm is 4 i. 10 marks] Show that if the firms compete as Cournot duopolists that the total in- dustry output is 4 and that if...
10. Two firms produce a homogenous product. The industry demand curve is: P-40-40 And the marginal cost for each firm is MC-4 What is the equilibrium P, Q for each firm in a Bertrand model? What is the equilibrium P, Q for each firm in a Cournot model? a. b.
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