does the demand curve faced by a perfectly competitive firm differ from the market demand curve in a perfectly competitive market? Explain. The demand curve is horizontal for a perfectly competitive firm and is driven by its price. When the price goes up, demand goes down. The market demand curve is the total quantity that individuals are willing to buy at any price, this is downward sloping which reflects the law of demand. 2. A perfectly competitive firm has the following fixed and
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Use the following to answer questions 1-2: Figure and Table: Market for Taxi Rides 1.|(Figure and Table: Market for Taxi Rides) The figure represents a competitive market for taxi rides. If the government now imposes an excise tax of $4 per ride (causing the supply curve to shift upward by that amount), then the government will collect tax revenues of ________, which might be used for worthwhile purposes. However, there will be an excess burden (or deadweight loss) to society of ________
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• Question 1 2.5 out of 2.5 points Compared to a perfectly competitive industry, a single-price monopoly produces Answer Selected Answer: less output. Correct Answer: less output. • Question 2 2.5 out of 2.5 points A natural monopoly arises when Answer Selected Answer: the long-run average cost curve slopes downward as it crosses the demand curve. Correct Answer: the long-run average cost curve slopes downward as it crosses the demand
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Microeconomics Essay Assignment Joyce Nebrida Question 1: Use supply and demand analysis to show the effect of a (binding) price ceiling in the market for rental properties. * What are the possible negative effects due to this price ceiling? The possible negative effects of this price ceiling according to supply and demand analysis is that landlords would have less incentive to offer apartments, and so the supply of apartments would drop, causing a persistent shortage of rental
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Submission Question 13 Assume that a market was served by an industry which was perfectly competitive when one of the firms was able to gain exclusive control of an essential input so that all of the other businesses closed down leaving the owner of the raw material as the sole supplier in the industry. Assume that there is no change in the demand for the product and that all the costs of production remain the same. a. Use the demand and supply model to show if there is likely to be any
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This chapter examines the basic elements of perfect competition and the competitive firm. It examines how businesses with a given market price make production decisions that help maximizing profit. Characteristics of Perfect Competition 1. Many firms, each is selling an identical product. Each firm’s output is a perfect substitute for the output of the other firms, so the demand for each firm’s output is perfectly elastic. 2. Large number of buyers who are indifferent from whom to buy
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Chapter 27 – Factor Markets: With Emphasis on the Labour Market Factor Markets Demand for a Factor All firms in all market structures purchase factors to make products to sell. E.g. farmers buy tractors and fertilizer to produce crops to sell. The demand for factors = derived demand (demand that is the result of some other demand). It is derived from and directly related to the demand for the product that the resources go to produce. If the demand for the product rises, so does demand for the
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Chapter 1: The phrase “Corporate social responsibility” refers to a corporation’s responsibility towards society. The topic is subjective, so naturally there is some disagreement about those “responsibilities”. Like do companies have a responsibility to donate money for charities or to give their employees higher wages and customers safer products? Or is their responsibility to maximize profit for their shareholders or stockholders? Shareholder theory: Milton Friedman argues that in a “free enterprise
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manager of a firm in a perfectly competitive firm, would have no discretion in setting prices of your product ANSWER Perfect competition demands very strict assumptions that are unlikely to be found in many if any markets in the real world. Markets that most closely equate to perfectly competitive ones are those in which there are very large numbers of buyers and suppliers, reasonably free entry and exit from the market and well informed consumers. It is in such markets that the purchase decision
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firstly market structures in an economy and compares the two extremes of perfectly competitive and monopoly markets, discusses the shutdown decision of a perfectly competitive market with illustrations and why a monopoly is important for a country. Secondly, the inflation and unemployment in Trinidad and Tobago are defined, examined and the origin of inflation and type of unemployment are decided upon. Table of Contents 1. Introduction 5 2. The perfectly competitive firm 6 2.1 Market equilibrium
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