1. Characteristics of competitive marketsThe competitive market model depends on the following three core assumptions:1. There must be many buyers and sellers-a few players can't dominate the market.2. Firms must produce an identical product-buyers must regard all sellers' products as equivalent.3. Firms and resources must be fully mobile, allowing free entry into and exit from the industry.The first two conditions imply that all consumers and firms are price takers. While the third is not necessary for price-taking behavior, assume for thisproblem that a market cannot maintain competition in the long run without free entry.Identify whether or not each of the following scenarios describes a competitive market, along with the correct explanation of why or why not.Is the market competitive?ScenarioIn a college town, students choose between two providers of wireless internet access. Allstudent housing is wired for both companies, and the internet service offered by bothproviders is equally fast and reliable.Gentoo Inc. controls the copyright to a popular series of mystery novels. It is the onlycompany with the right to legally publish books in the series in the United States.In a large city, one chain of coffee shops controls a large market share because localsbelieve its coffee tastes better than that of its competitors.Dozens of clothing manufacturers produce plain black undershirts. Consumers view plainblack undershirts as identical and have no preference which company makes theirundershirts.

Under a perfectly competitive market: A large number of buyers and sellers operate. All firms…

In a college town, students choose between two providers of wireless internet access. All student housing is wired for both companies, and the internet service offered by both providers is equally fast and reliable. Gentoo Inc. controls the copyright to a popular series of mystery novels. It is the only company with the right to legally publish books in the series in the United States. In a large city, one chain of coffee shops controls a large market share because locals believe its coffee tastes better than that of its competitors. Dozens of clothing manufacturers produce plain black undershirts. Consumers view plain

In a college town, students choose between two providers of wireless internet access. All student housing is wired for both companies, and the internet service offered by both providers is equally fast and reliable. Gentoo Inc. controls the copyright to a popular series of mystery novels. It is the only company with the right to legally publish books in the series in the United States. In a large city, one chain of coffee shops controls a large market share because locals believe its coffee tastes better than that of its competitors. Dozens of clothing manufacturers produce plain black undershirts. Consumers view plain

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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1.Show and explain how the short run supply curve of the perfectly competitive firm is derived 2.Identify what constitutes social cost of production. 3.By means of two examples explain the principle that economic agent take decisions at the margin
2. Market structures For each of the following scenarios, identify the number of firms present, the type of product, and the appropriate market model. Select the matching entry for each dropdown box in the following table. Scenario There are hundreds of colleges and universities that serve millions of college students each year. The colleges vary by location, size, and educational quality, which allows students with diverse preferences to find schools that match their needs. Dozens of companies produce plain white socks. Consumers regard plain white socks as identical and don't care about who sells them their socks. The technology for producing socks is widely known, and any reputable person who wanted to start a sock manufacturing business could obtain a loan from a bank to buy the necessary machinery. In a small town, there are four providers of broadband Internet access: a cable company, the phone company, and two satellite companies. The Internet access offered by all four…
Give typing answer with explanation and conclusion Which of the following characteristic(s) does not describe a competitive market? 1. A market where firms can freely enter or exit the market. 2. A market where firms sell a differentiated product. 3. A market with few buyers and sellers. 4. A market where firms sell a nearly identical product. Choices A.2 and 3 B.1, 2 and 3 C.1, 3, and 4
10. Characteristics of competitive markets The competitive market model depends on the following three core assumptions: 1. There must be many buyers and sellers-a few players can't dominate the market. 2. Firms must produce an identical product-buyers must regard all sellers' products as equivalent. 3. Firms and resources must be fully mobile, allowing free entry into and exit from the industry. The first two conditions imply that all consumers and firms are price takers. While the third is not necessary for price-taking behavior, assume for this problem that a market cannot maintain competition in the long run without free entry. Identify whether or not each of the following scenarios describes a competitive market, along with the correct explanation of why or why not. Scenario Is the market competitive? Gentoo Inc. controls the copyright to a popular series of mystery novels. It is the only company with the right to legally publish books in the series in the United States. In a…
3) List and describe the market structures.
7. Which of the following is true? a. Productive efficiency occurs in perfect competition because the firm produces at the minimum of the ATC curve. b. Allocative efficiency occurs when P = MC; production is allocated to reflect consumers' wants. C. Both Productive efficiency occurs in perfect competition because the firm produces at the minimum of the ATC curve and Allocative efficiency occurs when P = MC; production is allocated to reflect consumers' wants are true. d. None of these is true.
1. when a firm has no ability to influence market prices it is said to be in what kind of a market? 2. using the power of your observation, identify what you consider as business firms or industry in your place which behaves as perfectly competitive market. Describe the nature of the firm or industry and explain why you consider them as perfectly competitive markets? 3. in a competitive market, how will the actions of any single buyer or seller impact the market price?
1. There must be many buyers and sellers-a few players can't dominate the market. 2. Firms must produce an identical product-buyers must regard all sellers' products as equivalent. 3. Firms and resources must be fully mobile, allowing free entry into and exit from the industry. The first two conditions imply that all consumers and firms are price takers. While the third is not necessary for price-taking behavior, assume for this problem that a market cannot maintain competition in the long run without free entry. Identify whether or not each of the following scenarios describes a competitive market, along with the correct explanation of why or why not. Is the market competitive? Scenario Dozens of clothing manufacturers produce plain black undershirts. Consumers view plain black undershirts as identical and have no preference which company makes their undershirts. There are thousands of car dealerships that serve millions of consumers each year. The dealerships vary by location,…
1. Explain how the long run differs from the short run in pure competition. 2. The basic model of pure competition reviewed in this chapter finds that in the long run all firms in a purely competitive industry will earn normal profits. If all firms will only earn a normal profit in the long run, why would any firms bother to develop new products or lower-cost production methods? Explain.
So, which of these options are true about the number of sellers in your market - the market for corn? Kim There are many sellers (and, of course, many buyers). James That's correct. Corn is a product produced globally. There are thousands, if not hundreds of thousands, of individual farmers. Нарру Economics Mentor Is the corn that you produce different from your competitors? What kind of product do you sell? Kim Differences exist (heterogeneous) Undifferentiated (homogeneous)
Profit is the incentive that drives our market economy. Firms make production, pricing, andhiring decisions based on their quest for profit. But what happens when a firm discoversthat it can make dramatically higher profits by stopping production altogether? In December2000, due to wild swings in the market for electricity, Kaiser Aluminium faced just such adecision.Kaiser Aluminium had contracted with Bonneville power for all of its electricity needs andfound itself in the unique position of being an electricity consumer and, potentially, anelectricity reseller. By December 2000, Kaiser faced a difficult decision of continuing itscurrent aluminium production and profit levels, or closing the plant to dramatically increaseits profit by simply reselling its electricity.When making production decisions, firms must consider both their costs and revenues. Oneimportant concern for many firms is utility costs. In 1996, Kaiser Aluminium Corporation inSpokane, Washington, entered into a…
Profit is the incentive that drives our market economy. Firms make production, pricing, andhiring decisions based on their quest for profit. But what happens when a firm discoversthat it can make dramatically higher profits by stopping production altogether? In December2000, due to wild swings in the market for electricity, Kaiser Aluminium faced just such adecision.Kaiser Aluminium had contracted with Bonneville power for all of its electricity needs andfound itself in the unique position of being an electricity consumer and, potentially, anelectricity reseller. By December 2000, Kaiser faced a difficult decision of continuing itscurrent aluminium production and profit levels, or closing the plant to dramatically increaseits profit by simply reselling its electricity.When making production decisions, firms must consider both their costs and revenues. Oneimportant concern for many firms is utility costs. In 1996, Kaiser Aluminium Corporation inSpokane, Washington, entered into a…