1 If an industry is perfectly competitive, then a single producer is a price taker? Why? Explain with examples. Yes it is correct to say that a single producer is a price taker when the industry is perfectly competitive because by definition a perfectly competitive market is one in which no single firm has influence either on the equilibrium price of the market or the total quantity supplied in the market. Thus, a firm entering the market operating in a competitive market has no incentive to
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2011-Practice for Final Exam 1. A monopoly firm is different from a competitive firm in that: A. there are many substitutes for a monopolist's product while there are no substitutes for a competitive firm's product. B. a monopolist's demand curve is perfectly inelastic while a competitive firm's demand curve is perfectly elastic. C. a monopolist can influence market price while a competitive firm cannot. D. a competitive firm has a U-shaped average cost curve while a monopolist does not.
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Perfectly Competitive Market Structure A perfectly competitive market structure can be characterized by having a large number of firms in the market, undifferentiated products, ease of entry or no barriers and complete information available to all participants. In this structure, consumers do not care about the identity of the specific supplier; the purchase decision is based on the price. Also in this structure, no single firm has influence over the price of the product. Lastly, participants
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competition is a market structure that in the long run produces allocative and productive efficiency. If all markets were operating with perfect competition then the best allocation of resources would occur for society. There are a few assumptions to perfect competition: * Firms attempt to maximise their profits * There are many participants in the market (buyers and seller), this is important so that no individual buyer or seller represents a large enough share of the market to influence the
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1. Determining changes in equilibrium price and quantity for a perfectly competitive industry given changes in demand and/or supply (Ch. 2, p. 60-65; Class Notes) A. Graphical analysis given demand and supply curves a) While there is increased awareness of Vitamin C available from orange juice, a hard, freezing winter occurs in most of the orange producing areas. Demand increases while supply decreases. b) While the technology used for tobacco production is
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supply of other products 3 Formulate a reason why the elasticity of demand is an important consideration 4 Provide two (2) examples of increasing-cost industries in your state and propose 4 Suggest how, under certain conditions, a perfectly competitive market 5 Use at least three (3) quality resources in this assignment 6 References. 7 1. Suggest how an economist would approach the problem of alcohol abuse. Provide two (2) possible solutions to this problem. Include the four (4) elements
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sellers in the market. Because of the large numbers of buyers and sellers selling the same product. This market is perfectly competitive. 2) In assignment 1, it was also stated that the market structure competitive and that the equilibrium price was to be determined by setting QD equal to QS. In a perfectly competitive market there are a large number of buyers and sellers. The products sold in this market are perfectly homogeneous. Examples of perfect competition are vegetable market, agricultural
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if he raised soybeans, he could earn $200 per acre. Is he currently earning an economic profit? Why or why not? 2. Determine whether each of the following is an explicit cost or an implicit cost: a) Payments for labor purchased in the labor market b) A firm’suse of a warehouse that it owns and could rent to another firm c) The wages that owners could earn if they did not work for themselves 3. What are economies of scale? Please give an example. What are diseconomies of scale? Please
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in assignment 1, the market structure (or selling environment) was perfectly competitive. In a perfectly competitive market there are a large number of buyers and sellers. The products sold in this market are perfectly homogeneous. Examples of perfect competition are vegetable market, market for cereals etc. In a real world situation, there are many sellers of low calorie microwavable food. If we observe the demand side, we can also find a large number of buyers in the market. With large number of
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Debate Are government controlled monopolies better than perfectly competitive markets? yes government controlled monopolies are better than perfectly competitive markets:- 1. The reason that governments tolerate monopolies is because they are also one themselves. They have ultimate monopolistic control and the legitimate use of power and force. Whether it’s
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