In perfect competition, what is the relationship between the demand for the firm's output and the market demand?In a perfectly competitive market, the market demand isO A. perfectly elastic; perfectly elasticO B.shown by a downward-sloping curve; perfectly elasticO C.shown by a downward-sloping curve; shown by a downward-sloping curveO D. perfectly elastic; shown by a downward-sloping curveand the demand faced by the individual firm isC

Perfect competition is an economic model of a market in which there are many buyers and sellers, all…

Answered: In a perfectly competitive market, the…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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What will happen in a perfectly competitive industry in response to firms earning a positive economic profit? * Firms will exit the industry. O The short-run industry supply curve will shift right. O The short-run industry supply curve will shift left. Firm output will increase. Market price will increase.
In the short run, profits when a competitive firm shuts down are-$8200, and they are -$350 when the firm continues to produce. This firm will minimize losses in the short run by Choose one: A. either shutting down or continuing to produce. O B. continuing to produce. O C. shutting down.
In a competitive market with free entry and exit from the market a permanent rise in demand will lead to Select one or more: O a. excess profits being made in the short run (before new firms can enter) O b. entry by new firms O c. a permanent rise in prices O d. normal profits being made in the long-run
Suppose that in a competitive market the equilibrium price is $2.50. What is marginal revenue for the last unit sold by the typical firm in this market? Select one: O a. less than $2.50 O b. more than $2.50 Oc. exactly $2.50 Od. The marginal revenue cannot be determined without knowing the actual quantity sold by the typical firm.
Because perfectly competitive firms are price takers, a permanent increase in the market demand does not change the price of the product in either the short run or long run. O A. True O B. False
Which of the following statements is TRUE? O Assume that wheat farmers operate in a competitive industry. A decrease in the cost of producing wheat will lead to greater profits for wheat farmers in the long run than in the short run. O A rational decision maker will never take sunk costs into account. A change in price will have no effect on total revenue when the own-price elasticity of demand is zero. O (From the perspective of the consumer) When the fixed fee increases, the quantity consumed will always decrease.
Assume that restaurants in aiports rent the space that they occupy and that the restaurant industry is competitive. Keeping in mind the concept of economic rent, we know that food prices will be higher at the airport restaurants than at other locations because: O airport restaurants generate larger economic profits than other restaurants at different locations. O the number of potential customers is greater at the airport locations. O the rent paid by the restaurant is higher than the rent paid at other locations. O demand for food at airports is less elastic than at other locations.
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Resources Submit All Question 6 of 30 Indicate whether each of the statements below about a perfectly competitive market is true or false. a. In general, the market demand curve in a perfectly competitive market is perfectly elastic. True False b. In general, an individual firm in a perfectly competitive market faces a perfectly elastic demand curve. True O False 46°F a
# 6
Suppose that a major luxury car producer exits the market in order to produce more economy cars. At the same time, a market research group reports that the average price of a luxury car is increasing, and the number of luxury cars sold is increasing. What must be happening to supply and demand. O The supply curve shifts to the left, and the demand curve shifts to the left. O The supply curve shifts to the left, and the demand curve shifts to the right. O Only the supply curve shifts to the left. O Only the supply curve shifts to the right.
MC ATC 10 Demand MR 81 10 12 Quantity In the above figure, the long-run equilibrium price and output are O $10 and 12. S8 and 10. S7 and 8. S10 and 10. Price

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