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.ScenarioDozens companies produce plain white socks. Consumers regard plainidentical and don't care who manufactures their socks.socks asA few major airlines account for the vast majority of air travel. Consumers view all airlinesas providing basically the same service and will shop around for the lowest price.There are hundreds of colleges that serve millions of students each year. The colleges varyby location, size, and educational quality, which enables students with diverse preferencesto find schools that match their needs.The government has granted a patent to a pharmaceutical company for an experimentalAIDS drug. That company is the only firm permitted to sell the drug.Competitive? 10. Characteristics of competitive marketsThe model of competitive markets relies on these 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.Competitive?ScenarioDozens of companies produce plain white socks. Consumers regard plain white socks asidentical and don't care who manufactures their socks.A few major airlines account for the vast majority of air travel. Consumers view all airlinesas providing basically the same service and will shop around for the lowest price.There are hundreds of colleges that serve millions of students each year. The colleges varyby location, size, and educational quality, which enables students with diverse preferencesto find schools that match their needs.

Forms of Market Market implies to a place where the trade of goods and services takes place. There…

and resources must be fully mobile, allowing free entry into and exit from the industry. conditions imply that all consumers and firms are price takers. While the third is not necessary for price-taking beha a market cannot maintain competition in the long run without free entry. ther or not each of the following scenarios describes a competitive market, along with the correct explanation of why Competitive? companies produce plain white socks. Consumers regard plain white socks as nd don't care who manufactures their socks. r airlines account for the vast majority of air travel. Consumers view all airlines

and resources must be fully mobile, allowing free entry into and exit from the industry. conditions imply that all consumers and firms are price takers. While the third is not necessary for price-taking beha a market cannot maintain competition in the long run without free entry. ther or not each of the following scenarios describes a competitive market, along with the correct explanation of why Competitive? companies produce plain white socks. Consumers regard plain white socks as nd don't care who manufactures their socks. r airlines account for the vast majority of air travel. Consumers view all airlines

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Price and cost (dollars per ride) The graph shows the market for the two zipline firms that operate in a resort city. If the firms decide to compete, then together they will produce rides at a price of per ride. 60 O A. 400: $30 MC O B. 400; $50 50 O C. between 200 and 400: between $30 and $50 40 O D. 200: $30 O E. 200; $50 30 20 'D 10 MR 100 200 300 400 500 Quantity (number of rides)
Please see the attached23
Give type answer
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…
Suppose the market for fresh pork is a competitive market. Initially, it is operatingat its long-run competitive equilibrium at a market price of $50.Owing to the spread of COVID-19, many people turn to buying frozen meat oncea week rather than fresh pork every day. As a result, the market price of fresh porkreduces to $30.a. With the aid of a pair of market-and-firm diagrams, illustrate how thiswould affect the equilibrium price and quantity in the fresh pork market andthe output of a typical butcher of fresh pork in the short-run.b. Suppose, for the situation in (a), the average cost of a typical butcher offresh pork is $40, which includes $15 on buying meat from suppliers, $12on paying rent, $8 on paying hourly wages on staff, and $5 on other costs.Explain whether a typical butcher should shut down in the short run.
er 11 i Suppose the market for corn is a purely competitive, constant-cost industry that is in long-run equilibrium. Now assume that an increase in consumer demand occurs. After all resulting adjustments have been completed, the new equilibrium price will be Multiple Choice OO O the same as the initial equilibrium price, but the new industry output will be greater than the original output. greater than the initial price, and the new industry output will be greater than the original output. less than the initial price, but the new industry output will be greater than the original output. the same as the initial equilibrium price, and the industry output will remain unchanged. 23 11,229 X OCT all Z A
Hello, this is a microeconomics question. Please use a drawing of a relevant graph to explain how does perfect competition ensure allocative efficiency? Not sure if I'm supposed to use this graph, but if i am please use it as reference when making your explantion to the question of how does perfect competition ensure allocative efficiency
18 IV 16 14 II 12 A P1=MR1 10 8. B Po=MRo 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 Quantity Utilize the graph above, which illustrates average fixed costs, average variable costs, average total costs, and marginal costs of production for a firm in a perfectly competitive market, to answer the following question. If the price is P1 what should the firm do? O The firm should shut down in the short-run because price is below AVC. In the long-run, they will assess the market conditions to see whether they should reopen for business or exit the market. The firm should decrease production because marginal revenue is greater than marginal cost. Therefore, the firm has not maximized operating profits. O The firm should exit the market because firms will soon enter. This will drive the price below ATC, which will Cost 41
Which assumption(s) underlying competitive markets implies (or imply) that firms are "price taking"? Explain.