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.ScenarioCompetitive?Dozens of companies produce plain white socks. Consumers regard plain white socks asidentical and don't care who manufactures their socks.Yes, meets all assumptionsNo, no free entryIn a small town, there are two providers of broadband Internet access: a cable companyand the phone company. The Internet access offered by both providers is of the sameNo, not many sellersspeed.No, not an identical productSeveral stores in the mall sell hooded sweatshirts. Each store's sweatshirts reflect thestyle of that particular store. Additionally, some makers use higher-quality cotton thanothers, which is reflected in the apparel's prices.Scholastik Inc. owns the U.S. copyright to a popular book series. It is the only companywith the legal right to publish books in the series in the United States.

The market structure in which there are a high number of vendors and buyers of a product is referred…

Scenario Competitive? Dozens of companies produce plain white socks. Consumers regard plain white socks as identical and don't care who manufactures their socks. Yes, meets all assumptions No, no free entry In a small town, there are two providers of broadband Internet access: a cable company and the phone company. The Internet access offered by both providers is of the same No, not many sellers speed. No, not an identical product

Scenario Competitive? Dozens of companies produce plain white socks. Consumers regard plain white socks as identical and don't care who manufactures their socks. Yes, meets all assumptions No, no free entry In a small town, there are two providers of broadband Internet access: a cable company and the phone company. The Internet access offered by both providers is of the same No, not many sellers speed. No, not an identical product

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter13: Firms In Competitive Markets

Section: Chapter Questions

Problem 1QR

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10. Characteristics of competitive markets The competitive market model depends on the following 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 this problem 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. Scenario Is the market competitive? Gentoo Inc. controls the copyright to a popular series of mystery novels. It is the only company with the right to legally publish books in the series in the United States. In a…
1. Characteristics of competitive markets The competitive market model depends on the following 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 this problem 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. Scenario The government grants a patent to a pharmaceutical company protecting an experimental cancer treatment. That company is the only pharmaceutical producer allowed to manufacture and sell the treatment. In a large…
1. Characteristics of competitive markets The competitive market model depends on the following 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 this problem 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. Is the market competitive? Scenario In a college town, students choose between two providers of wireless internet access. All student housing is wired for both companies, and the internet service offered by both…
1. Characteristics of competitive markets The 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 sources must be fully mobile, allowing for 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 this problem to a market cannot maintain competition in the long run without free entry. Identify whether or not each of the following scenarios describes a competitive marke along with the correct explanation of why or why not. Competitive? Scenario Scholastik Inc. owns the U.S. copyright to a popular book series. It is the only company with the legal right to publish books in the series in the United States. In a small town, there are two providers…
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10. Characteristics of competitive markets The 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 this problem 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? Scenario Dozens of companies produce plain white socks. Consumers regard plain white socks as identical and don't care who manufactures their socks. A few major airlines account for the vast majority of air…
2. Market structures For each of the following scenarios, identify the number of firms present, the type of product, and the appropriate market model. Select the matching entry for each dropdown box in the following table. Scenario A large city has lots of small shops where people can buy sweaters. Each store's sweaters reflect the style of that particular store. Additionally, some stores use higher-quality yarn than others, which is reflected in their price. Dozens of companies produce plain white socks. Consumers regard plain white socks as identical and don't care about who sells them their socks. The technology for producing socks is widely known, and any reputable person who wanted to start a sock manufacturing business could obtain a loan from a bank to buy the necessary machinery. Only three airlines fly from San Francisco to Medford, Oregon. No new airline will enter this market, because there are not enough customers to share among four or more airlines without each one…
2. Market structures For each of the following scenarios, identify the number of firms present, the type of product, and the appropriate market model. Select the matching entry for each dropdown box in the following table. Scenario There are hundreds of colleges and universities that serve millions of college students each year. The colleges vary by location, size, and educational quality, which allows students with diverse preferences to find schools that match their needs. Dozens of companies produce plain white socks. Consumers regard plain white socks as identical and don't care about who sells them their socks. The technology for producing socks is widely known, and any reputable person who wanted to start a sock manufacturing business could obtain a loan from a bank to buy the necessary machinery. In a small town, there are four providers of broadband Internet access: a cable company, the phone company, and two satellite companies. The Internet access offered by all four…
Characteristics of competitive markets The 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 this problem that a market cannot maintain competition in the long run without free entry.
1. when a firm has no ability to influence market prices it is said to be in what kind of a market? 2. using the power of your observation, identify what you consider as business firms or industry in your place which behaves as perfectly competitive market. Describe the nature of the firm or industry and explain why you consider them as perfectly competitive markets? 3. in a competitive market, how will the actions of any single buyer or seller impact the market price?
2. List the features that characterize a perfect competitive market. 3. What is a perfectly competitive market? Perfectly competitive markets establish capitalist justice and maximize utility in a way that respects buyers’ and sellers’ negative rights? Explain how and what types of negative rights are respected.
1. Assuming a perfectly competitive market and using a market demand and supply model: (a) Illustrate the market equilibrium for Sydney apartments before the city-wide lockdown was implemented. (b) Explain, with the aid of a new diagram, the impact of the Sydney city-wide lockdown on the market from part (a) assuming the construction industry was still allowed to operate nomally. (c) Suppose the NSW govemment was considering doubling the first-home buyer's grant. Explain the impact of this on the market for Sydney apartments and illustrate this on your diagram from part (b).