Assume firms decide to enter the market, how will this affect market price and quantity in the long run?

Q: Most raisins in the U.S. are produced in California. Raisins come from grapes, in a fairly simple…

A: A cartel refers to a collection of independent businesses which enter into an agreement with each…

Q: Coke and Pepsi dominate the cola market. Suppose that the marginal cost of making cola is $2. Assume…

A: A perfectly competitive market is a theoretical model used in economics to describe a market…

Q: Suppose the shirts industry is perfectly competitive and begins in a long-run equilibrium. (a)…

A: Perfect competition refers to the situation where there are many buyers and sellers exist in the…

Q: Identify the defining characteristics of a competitive market.

A: Perfect or pure competition is a form of market in which a large number of perfectly informed buyers…

Q: You read in a business magazine that farmers are reaping high profits. With the theory of perfect…

A: A perfect competition is a market structure where the price of the commodity sold is same and is…

Q: Suppose that the market for frying pans is a competitive market. The following graph shows the daily…

A: Total Revenue (TR) is determined by increasing the given price function with the quantity as…

Q: Using the graph on the next page, do the following problems: Determine the profit maximizing level…

A: The marginal cost (MC) curve is calculated by dividing the change in total cost by the change in…

Q: Suppose that the market for black sweaters is a competitive market. The following graph shows the…

A: A perfect market, sometimes known as an atomistic market, is characterized by numerous idealizing…

Q: Suppose that the market for black sweaters is a competitive market. The following graph shows the…

A: Profit maximization occurs at the point where the marginal revenue and marginal cost are equal.…

Q: What is the equilibrium or profit-maximizing quantity of production for a perfectly competitive…

A: Prefect competitive market is:- 1) in perfect competitive market, there are many number of sellers…

Q: How is non-price competition different from price competition?

A: There are two ways producers can compete (with their aim being profit maximization). They are: Price…

Q: In the long-run, a perfectly competitive firm will earn what kind of economic profit?

A: In the long run, a perfectly competitive firm will earn normal/zero economic profit.

Q: In the long run, perfectly competitive firms make zero economic profit. If this is the case, why…

A: When a company's economic profit is zero, it is in a state of normal profit, which is why normal…

Q: All buyers in a perfectly competitive market set prices to compete in their market? is it true or…

A: Marginal cost is the additional cost incurred in order to produce an additional unit of output.

Q: What happens when a perfectly competitive market is in equilibrium?

A: A perfectly competitive market is a market structure in which there are many buyers and sellers. The…

Q: How does a market compete with other firms efficiently to maintain profit in a competitive market…

A: Competitive market: In a competitive market framework, many firms face the market demand altogether.…

Q: Will a perfectly competitive market display allocative efficiency? Why or why not?

A: ANS Allocative Efficiency occurs when the total surplus is maximized. Where the total surplus is…

Q: Explain how economics make profit or loss when firms are perfectly competitive.

A: In a competitive market there are large number of firms producing similar and identical products…

Q: n the short run, at a market price of $20 per candle, this firm will choose to produce candles per…

A: Profit Maximization refers to the process taken up by the firms to make sure that the best output…

Q: In the short run, at a market price of $45 per watch, this firm will choose to produce On the…

A: Average Total Cost represents the total production cost with respect to the overall quantity…