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Managerial Economics: A Problem Solving Approach
5th Edition
ISBN: 9781337106665
Author: Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher: Cengage Learning
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Chapter 10, Problem 10MC
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In perfect competition_______.
Select one:
a. demand for the good or service is small relative to the minimum efficient scale of a single producer.
b. the size of demand for the good or service relative to the minimum efficient scale of a single producer does not affect competition.
c. demand for the good or service can be small relative to the minimum efficient scale of a single producer as long as the goods or services are not identical.
d. demand for the good or service is large relative to the minimum efficient scale of a single producer.
In an economy operating under perfect competition, wheat prices and trading
volume were in balance at a certain level. Although there is no change in the
amount of demand, the balance affected by one of the reasons on the side is
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disturbed; caused a decrease in wheat prices in the market.
This reason causing the deterioration of the market balance; Which of the
following could be?
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A. During the production period, a significant seasonal famine arose.
B. A significant increase in bread prices in the country; It also had a decreasing
effect on wheat prices.
A. In the said production period, abundance was experienced in wheat
production as a result of the very good season.
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D. Income levels of the people in the country have increased.
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E. There was an unexpected increase in the population of the country and an
increase in wheat imports.
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Q. Suppose the book-printing industry is competitive and begins in long-run equilibrium.
a. Draw a diagram describing the typical firm in the industry.
b. Hi-Tech Printing Company invents a new process that sharply reduces the cost of printing
books. What happens to Hi-Tech’s profits and the price of books in the short run when
Hi-Tech’s patent prevents other firms from using new technology?
c. What happens in the long run when the patent expires and other firms are free to use the technology?
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Managerial Economics: A Problem Solving Approach
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Similar questions
- Give an example in the marketplace that describes the principles of the free market (perfect competition) and competition.arrow_forwardDefine a perfectly competitive market. A. Market that makes it possible for firms or businesses to reduce the quality of their products or services in order to cut their own costs B. Market model where many firms and businesses compete against each other to create an innovative product at the best cost, which ultimately benefits society C. Market where a firm or business has no competition in manufacturing a good or providing a service D. Market with few sellers and many buyersarrow_forwardMarket Structures... Economists try to identify market structures in order to understand how firms and consumers behave. We characterize market structures by the number of buyers or sellers who are present, by the relative ease with which a new seller may enter the market, by the variation in the product from one supplier to the next, and by the amount of competition present. Perfect Competition Perfect competition is the most competitive market structure. A market with perfect competition has a large number of buyers and sellers. In this type of market, there are no barriers to entry or exit, which means a new seller will have a fairly easy time if he wants to start doing business. The product is homogeneous, in the sense that one bushel of wheat isn't really all that different from any other bushel of wheat. A perfectly competitive market is also characterized by the availability of perfect information, or free and equal access for everyone to information about the product, its…arrow_forward
- Which statement is wrong? A. profit is a mechanism to allocate resources B. when economic profit is positive, it is a signal for other firms to enter C. when economic profit is negative, the losing firms will leave the industry D. producers always earn economic profits E. all are correctarrow_forwardHow would you discuss competitive advantage and how a company estimates their own competitive advantage?arrow_forwardWho said “The customer experience is the next competitive battleground” ?arrow_forward
- Use this table to answer the following question. Output 1 2 3 4 5 6 7 8 9 10 Total Variable Cost $20 $24 $33 $40 $45 $60 $77 $96 $180 $200 The government just mandated that all firms must install a new technology to reduce pollution. The new technology costs $3. The market price is $10. In the long run, will the firm stay open or shut down? Select the best answer. Answer The firm will stay open. O There is not enough information to determine what the firm will do. O The firm will shut down. Keypad Keyboard Shortcutsarrow_forwarda. In the long run, what is the firm's equilibrium production decision? b. In the long run, what is the market equilibrium price and quantity? What is the industry's long-run supply curve? c. In the long run, how many firms will stay in the industry? d. If the government decide to impost a $7 tax per unit, what is the new long-run equilibrium market price and quantity? e. How many firms are producing after the taxarrow_forwardEconomics 1. Rob Doe just started a ice cream business within a perfectly competitive market. The new business man was told that he would charge a price that is equal to marginal revenue. The market clearing price for ice cream is $20 dollars per scoop. The total cost for producing ice cream is given by: Total cost = q2 + 100q + 500 where q is the number of ice cream produced in a typical day. a. How many ice cream should Rob choose to produce to maximize profit? b. Calculate Rob's maximum daily profit c. Graph these results, and label Rob's supply curvearrow_forward
- SPRING 四 pa 70° Question 5 of 50 Which of the following questionis: might be asked by an economist who is using critical thinking to solve a problem2 O How could Social Security and Medicare better use their resources to expand benefits? O Which principles of a command economy have the most negative effects on competition? O How might a hurricane in Florida affect the prices of crops grown in the state? O AIl of these choices are correct. Back Nextarrow_forwardSnapshot of question(s) is attached.arrow_forward1. Why do firms exist in a market economy?arrow_forward
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