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- all of the following are characteristics of a perfectly competitive market except: -small firm size -no barriers to entry -many firms -unique heterogenous productsIn this week’s discussion we focus on market competition and the power of firms to set prices. (a) Along with your textbook reading, review the videos, blog, and articles on market competition. Then respond to the following questions: If all the firms in an industry are charging the same price, is it fair to say that they are engaged in price collusion? To what extent might this be a plausible explanation? Are there any other possible explanations? What type of market structure do you think is more conducive to firms engaging in price-fixing? Why do you think the price-fixing situation in the case described went on for so long? (one paragraph) 7 Canadian companies committed indictable offences in bread-price fixing scandal: Competition Bureau | Globalnews.ca https://globalnews.ca/video/rd/1150756931838/?jwsource=clChoose a description that is the least appropriate description of a perfectly competitive market. (1) Economies of scale prevails for some range of quantities of output. (2) All the relevant information about the market is known very well by market participants. (3) Differentiated products are sold by sellers. (4) The sales volume of one seller is very small relative to the size of the market.
- A typical profit-maximizing firm in a perfectly competitive constant-cost industry is earning a positive economic profit.(a) Is the market price greater than, less than, or equal to the firm's price? Explain.(b) Draw correctly labeled side-by-side graphs for both the market and a typical firm and show each of the Following(i) Market price and quantity, labeled Pm and Qm.(ii) The firm's quantity, labeled Qf(iii) The firm's average revenue curve, labeled AR(iv) The firm's average total cost curve, labeled ATC(v) The area representing total cost, shaded completely(c) If one firm in the market were to raise its price, what will happen to its total revenue? Explain.(d) Now suppose the market is in long-run equilibrium. The government gives a lump-sum subsidy to each firmproducing in the industry. Indicate whether each of the following will increase, decrease, or remain the same.(i)The firm's quantity in the short run. Explain.(ii) The market price and quantity in the long run. Explain.a) What is the profit maximising condition in a market with perfect competition?b) Explain what is meant by abnormal profit? What is the adjustment process from short-run abnormal profit to long-run equilibrium in a perfectly competitive market?c) Please find below Pricing options for firm A and B, along with individual payoffs (Firm A’s payoff/Firm B’s payoff)Firm BFirm APrice £2 Price £1Price £2 £20,000/£20,000 £10,000/£24,000Price £1 £24,000/£10,000 £12,000/£12,000Assume you are the pricing manager at Firm A;i) What is your payoff for a ‘maximin’ strategy?ii) What is your payoff for a ‘maximax’ strategy?iii) Does a dominant strategy exist within this prisoners’ dilemma?A market is said to be perfectly-competitive when: the market may be dominated by one or two major companies, but there are many smaller companies also in the market. there are any number of products, equivalent buying and selling prices, and individual buyers or sellers can affect those prices by their own actions. there is a homogeneous product, equivalent buying and selling prices, and no individual buyers or sellers can affect those prices by their own actions. there is no opportunity costs incurred by the vendor nor by the buyer. there are any number of products, equivalent buying and selling prices, and individual buyers or sellers can affect those prices by their own actions, but there are no opportunity costs for buyers or sellers.
- Question: Derive theoretically and graphically the supply curve of an industry.Which of the following is NOT a charactersitic of the model of perfectly competitive market? a) Many sellers produce an identical product. b) Firms can increase their prices by reducing their product. c) Firms have freedome of entry into the market. d) No signs firm can influence the market price.30) Which one of the following is true for a perfectly competitive industry? a) there are many big firms b) firms have some influence on the price c) each firm produces identical homogenous products d) entry and exit to the market is not free
- Please answer all 1. Coldwater Bicycle Company operates its factories at capacity and holds a dominant market position in its home country. When it receives a premium priced order from a new customer in another country, it must decide whether to fill that order or continue to supply the full demand in its home market. When it decided not to completely fill the new order, it incurred Group of answer choices a. Sunk costs b. Average costs c. Opportunity costs d. Marginal costs 2. What might happen if a car dealership is awarded a bonus by the manufacturer for selling a certain number of its cars monthly, but the dealership is just short of that quota near the end of the month? Group of answer choices a. Potential buyers will lose buying power at the dealer b. It may sell the remaining cars at huge discounts to hit the quota c. It creates an incentive to sell cars from different manufacturers d. It would ruin the relationship between dealer and manufacturer…multiple choice Assume that the tuna fishing industry is perfectly competitive. Which of the following best characterizes the industry if, as demand for tuna increases, fishing boats have to go farther into the ocean to harvest tuna? 1- a constant-cost industry 2- a fixed-cost industry 3- a decreasing-cost industry 4- an increasing-cost industryAnswer the following, providing a graphical illustration along with your answer where necessary:a) What is the profit maximising condition in a market with perfect competition?b) Explain what is meant by abnormal profit? What is the adjustment process from short-runabnormal profit to long-run equilibrium in a perfectly competitive market?c) Please find below Pricing options for firm A and B, along with individual payoffs (Firm A’spayoff/Firm B’s payoff)Firm BFirm APrice £2 Price £1Price £2 £20,000/£20,000 £10,000/£24,000Price £1 £24,000/£10,000 £12,000/£12,000Assume you are the pricing manager at Firm A;i) What is your payoff for a ‘maximin’ strategy?ii) What is your payoff for a ‘maximax’ strategy?iii) Does a dominant strategy exist within this prisoners’ dilemma?