As we begin to study different market structures, consider a market that is fiercely competitive. List the industry. What are the pros and cons of competition? Is competition in this industry a good thing? Why or why not? Would you say this is a purely competitive industry? Explain.

As we begin to study different market structures, consider a market that is fiercely competitive. List the industry. What are the pros and cons of competition? Is competition in this industry a good thing? Why or why not? Would you say this is a purely competitive industry? Explain.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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As we begin to study different market structures, consider a market that is fiercely competitive.

List the industry.

What are the pros and cons of competition?

Is competition in this industry a good thing? Why or why not?

Would you say this is a purely competitive industry? Explain.

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Columbia’s coffee producers operate as if they are in a perfectly competitive industry. Which statement is most likely to be true? In Columbia, A.there is one state owned entity that produces all coffee in the country. B.there are hundreds of thousands of individually owned coffee farms, all producing the same type of coffee. C.there are a few large coffee farms that dominate the market. D.there are numerous coffee farms, each producing a unique variety of coffee bean that is distinct from the product of their competitors.
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QUESTION 2: Consider a competitive market. There are X number of firms in this market. Every firm is facing the following set up: a. How does the number of firms in the industry, affect each firm's demand curve? Why? b. What will be the production in this market? What price will the companies charge? How much profit will firms make? c. What is the minimum number of firms in the market so that everyone is making losses? d. How many firms will exist in this market in the long-run?
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What is the correct answer? In pure competition, if the market price of the product is lower than the minimum average total cost of the firms, then A. some firms will enter the industry and the industry supply will increase B. other firms will exit the industry and the industry supply will decrease C. some firms will exit the industry and the industry supply will increase D. other firms will enter the industry and the industry supply will decrease