Homework Answers
Answer : Option a is correct.In a perfect competitive firm , the price and quantity of a good is the intersection of demand and supply .
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2. What determines the price and quantity of a good in a perfectly competitive market? a....
In a competitive (same as perfectly competitive) market, the equilibrium price is determined : at the intersection...
In a competitive (same as perfectly competitive) market, the equilibrium price is determined : at the intersection of the firm's demand curve and the market supply curve at the intersection of the market demand and supply curves at the intersection of the firm's demand and marginal cost curves so as to cover the costs of the potential firms so as to cover the costs of the firms currently in the industry
1. In a competitive market, the quantity of a product produced and the price of the...
1. In a competitive market, the quantity of a product produced and the price of the product are determined by a. buyers. b. sellers. c. both buyers and sellers. d. None of the above is correct. 2. Which of the following statements is correct? a. Buyers determine supply and sellers determine demand. b. Buyers determine demand and sellers determine supply. c. Buyers determine both demand and supply d. Sellers determine both demand and supply 3. The demand for a good...
10.19. In a perfectly competitive market, the market demand curve is Qd = 10 -p, and...
10.19. In a perfectly competitive market, the market demand curve is Qd = 10 -p, and the market supply curve is Q 1.5P a) Verify that the market equilibrium price and quantity in the absence of government intervention are Pd= P 4 and Qd Q 6. b) Consider two possible government interventions: (1)A price ceiling of $I per unit; (2) a subsidy of $5 per unit paid to producers. Verify that the equilibrium market price paid by consumers under the...
Consider the market for soft drinks. Assume that the market is perfectly competitive. Use the model...
Consider the market for soft drinks. Assume that the market is perfectly competitive. Use the model of supply and demand to determine the effects on equilibrium price and quantity of soft drinks for the following events. part a: Workers at soft drink bottling plants go on strike demanding higher wages part b: Household income increases and soft drinks are a normal good part c: The price of fruit juice, a substitute for soft drinks, decreases a. price decreases, quantity decreases...
What is the equilibrium price and quantity? Market Demand Price Market Supply 60 100 60 40...
What is the equilibrium price and quantity? Market Demand Price Market Supply 60 100 60 40 200 80 20 300 100 10 400 120 Equilibrium Price: _________ Equilibrium Quantity: _________ Question 2: Graphically, an equilibrium can be found where: A. at any price above the intersection of demand and supply curves. B. at any price below the intersection of the demand and supply curves. C. the intersection of the demand curve and the horizontal axis. D. the intersection of the...
For a perfectly competitive market, daily demand for a good is given by P-10-Q, where P...
For a perfectly competitive market, daily demand for a good is given by P-10-Q, where P ¡s price and Q is quantity. Supply is given by P = 2 + Q. Suppose the government imposes an excise tax of $2 on sellers in the market. (An excise tax is a tax per unit.) (a) What is the original (before the tax) producer surplus and (b)new (after the tax) producer surplus?
33. Which of the following statements is true of a perfectly competitive market? a. At equilibrium,...
33. Which of the following statements is true of a perfectly competitive market? a. At equilibrium, it is possible to make someone better off without making someone else worse off. b. The equilibrium price in a competitive market efficiently allocates scarce resources to participants. c. The sum of consumer surplus and producer surplus is not maximized at the equilibrium. d. The equilibrium price is determined by a few large firms in the market. 34. The concept of the invisible hand...
Question 3 (32 marks) a The market of popcom is perfectly competitive. The market demand curve...
Question 3 (32 marks) a The market of popcom is perfectly competitive. The market demand curve and supply curve are as follows: Demand: Qp = 2000-P Supply: 2 = 1400 +2P Firm K is one of the many firms producing popcorn in the market. The total cost function and marginal cost function are as follows: TC(q) =1250 +30 +29 MC(q) - 30 +49 i At what output level (g) would the average total cost be minimized? (6 marks) ii What...
DEMAND & SUPPLY: Consider the market for bananas which is known to be perfectly competitive. The...
DEMAND & SUPPLY: Consider the market for bananas which is known to be perfectly competitive. The market is characterized by the following relationships: QD = 10,000 – 140P QS = 7500 + 125P Plot the demand curve and the supply curve on a graph. Clearly label the axes and the intercepts. Why is the demand-curve downward-sloping? What is the slope of the demand curve? Why is the supply-curve upward-sloping? What is the slope of the supply curve? What is the...
Suppose that some firms in a perfectly competitive market are making positive economic profits. Which one...
Suppose that some firms in a perfectly competitive market are making positive economic profits. Which one of the following would not be expected to occur? a. All firms’ economic profits would eventually be driven to zero at equilibrium. b. The equilibrium quantity sold will fall. c. The equilibrium price will fall. d. The supply curve will shift to the right. e. More firms would enter the market. . Which one of the following is not characteristic of a pure monopoly?...
1. In a competitive market, the quantity of a product produced and the price of the product are determined by a. buyers. b. sellers. c. both buyers and sellers. d. None of the above is correct. 2. Which of the following statements is correct? a. Buyers determine supply and sellers determine demand. b. Buyers determine demand and sellers determine supply. c. Buyers determine both demand and supply d. Sellers determine both demand and supply 3. The demand for a good...
10.19. In a perfectly competitive market, the market demand curve is Qd = 10 -p, and the market supply curve is Q 1.5P a) Verify that the market equilibrium price and quantity in the absence of government intervention are Pd= P 4 and Qd Q 6. b) Consider two possible government interventions: (1)A price ceiling of $I per unit; (2) a subsidy of $5 per unit paid to producers. Verify that the equilibrium market price paid by consumers under the...
Consider the market for soft drinks. Assume that the market is perfectly competitive. Use the model of supply and demand to determine the effects on equilibrium price and quantity of soft drinks for the following events. part a: Workers at soft drink bottling plants go on strike demanding higher wages part b: Household income increases and soft drinks are a normal good part c: The price of fruit juice, a substitute for soft drinks, decreases a. price decreases, quantity decreases...
For a perfectly competitive market, daily demand for a good is given by P-10-Q, where P ¡s price and Q is quantity. Supply is given by P = 2 + Q. Suppose the government imposes an excise tax of $2 on sellers in the market. (An excise tax is a tax per unit.) (a) What is the original (before the tax) producer surplus and (b)new (after the tax) producer surplus?
Question 3 (32 marks) a The market of popcom is perfectly competitive. The market demand curve and supply curve are as follows: Demand: Qp = 2000-P Supply: 2 = 1400 +2P Firm K is one of the many firms producing popcorn in the market. The total cost function and marginal cost function are as follows: TC(q) =1250 +30 +29 MC(q) - 30 +49 i At what output level (g) would the average total cost be minimized? (6 marks) ii What...
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