Pure competition in the long run and short run.

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Answer 1

Question

Chapter 11, Problem 1DQ

To determine

Pure competition in the long run and short run.

Expert Solution & Answer

Explanation of Solution

During a short run, the industry will have a precise number of companies. All of these will have a plant size that is set and is not in a position to be altered as it is there for a short run. Firms might shut down given the impression that it won't be making commodities during the short run, but they will not have adequate time to pay off its due obligations and their business will eventually close down.

In contrast, the industry, during the long run will have companies that are already in it and have ample time to either expand or minimize their size. Also, the company numbers in the industry can go up or come down as new companies enter or already present firms leave.

Economics Concept Introduction

Concept Introduction:

Pure Competition: In pure competition, the number of buyers and sellers are large. They are selling homogenous products. Price is fixed by the market force. An individual producer or consumer cannot influence the price. There is no restriction for entry or exit, in the business. Consumers and producers are well aware of the market situation.

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Students have asked these similar questions

In the table below, the firm; Output Total Revenue Total Cost $0 $30 $60 $90 $120 $150 $180 $25 $49 $69 $91 $117 $147 $180 O a. cannot be in a perfectly competitive industry, because its short-run economic profits are greater than zero. O b. must be in a perfectly competitive industry, because its marginal cost curve eventually rises. O c. cannot be in a perfectly competitive industry, because its long-run economic profits are greater than zero O d. must be in a perfectly competitive industry, because its marginal revenue is constant. 123 456

Suppose that the paper clip industry is perfectly competitive. Also assume that the market price for paper clips is 2 cents per paper clip. The demand curve faced by each firm in the industry is: LO10.3 a. A horizontal line at 2 cents per paper clip. b. A vertical line at 2 cents per paper clip. c. The same as the market demand curve for paper clips. d. Always higher than the firm’s MC curve.

The figure shows a perfectly competitive firm. The firm is operating; that is, it has not shut down. The firm produces O A. 20 units of output and earns a normal profit. MC ATC 50 B. 10 units of output and incurs an economic loss. 40 O C. 10 units of output and earns a normal profit. O D. 20 units of output and incurs an economic loss. 30 MR 20 10 10 30 40 Quantity (per day) Price and costs (dollars) 20

Answer 2

Question

Chapter 11, Problem 1DQ

To determine

Pure competition in the long run and short run.

Expert Solution & Answer

Explanation of Solution

During a short run, the industry will have a precise number of companies. All of these will have a plant size that is set and is not in a position to be altered as it is there for a short run. Firms might shut down given the impression that it won't be making commodities during the short run, but they will not have adequate time to pay off its due obligations and their business will eventually close down.

In contrast, the industry, during the long run will have companies that are already in it and have ample time to either expand or minimize their size. Also, the company numbers in the industry can go up or come down as new companies enter or already present firms leave.

Economics Concept Introduction

Concept Introduction:

Pure Competition: In pure competition, the number of buyers and sellers are large. They are selling homogenous products. Price is fixed by the market force. An individual producer or consumer cannot influence the price. There is no restriction for entry or exit, in the business. Consumers and producers are well aware of the market situation.

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Answer 3

Question

Chapter 11, Problem 1DQ

To determine

Pure competition in the long run and short run.

Expert Solution & Answer

Explanation of Solution

During a short run, the industry will have a precise number of companies. All of these will have a plant size that is set and is not in a position to be altered as it is there for a short run. Firms might shut down given the impression that it won't be making commodities during the short run, but they will not have adequate time to pay off its due obligations and their business will eventually close down.

In contrast, the industry, during the long run will have companies that are already in it and have ample time to either expand or minimize their size. Also, the company numbers in the industry can go up or come down as new companies enter or already present firms leave.

Economics Concept Introduction

Concept Introduction:

Pure Competition: In pure competition, the number of buyers and sellers are large. They are selling homogenous products. Price is fixed by the market force. An individual producer or consumer cannot influence the price. There is no restriction for entry or exit, in the business. Consumers and producers are well aware of the market situation.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 11, Problem 1DQ

To determine

Pure competition in the long run and short run.

Expert Solution & Answer

Explanation of Solution

During a short run, the industry will have a precise number of companies. All of these will have a plant size that is set and is not in a position to be altered as it is there for a short run. Firms might shut down given the impression that it won't be making commodities during the short run, but they will not have adequate time to pay off its due obligations and their business will eventually close down.

In contrast, the industry, during the long run will have companies that are already in it and have ample time to either expand or minimize their size. Also, the company numbers in the industry can go up or come down as new companies enter or already present firms leave.

Economics Concept Introduction

Concept Introduction:

Pure Competition: In pure competition, the number of buyers and sellers are large. They are selling homogenous products. Price is fixed by the market force. An individual producer or consumer cannot influence the price. There is no restriction for entry or exit, in the business. Consumers and producers are well aware of the market situation.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 11, Problem 1DQ

To determine

Pure competition in the long run and short run.

Expert Solution & Answer

Explanation of Solution

During a short run, the industry will have a precise number of companies. All of these will have a plant size that is set and is not in a position to be altered as it is there for a short run. Firms might shut down given the impression that it won't be making commodities during the short run, but they will not have adequate time to pay off its due obligations and their business will eventually close down.

In contrast, the industry, during the long run will have companies that are already in it and have ample time to either expand or minimize their size. Also, the company numbers in the industry can go up or come down as new companies enter or already present firms leave.

Economics Concept Introduction

Concept Introduction:

Pure Competition: In pure competition, the number of buyers and sellers are large. They are selling homogenous products. Price is fixed by the market force. An individual producer or consumer cannot influence the price. There is no restriction for entry or exit, in the business. Consumers and producers are well aware of the market situation.

Answer 6

Chapter 11, Problem 1DQ

To determine

Pure competition in the long run and short run.

Expert Solution & Answer

Explanation of Solution

During a short run, the industry will have a precise number of companies. All of these will have a plant size that is set and is not in a position to be altered as it is there for a short run. Firms might shut down given the impression that it won't be making commodities during the short run, but they will not have adequate time to pay off its due obligations and their business will eventually close down.

In contrast, the industry, during the long run will have companies that are already in it and have ample time to either expand or minimize their size. Also, the company numbers in the industry can go up or come down as new companies enter or already present firms leave.

Economics Concept Introduction

Concept Introduction:

Pure Competition: In pure competition, the number of buyers and sellers are large. They are selling homogenous products. Price is fixed by the market force. An individual producer or consumer cannot influence the price. There is no restriction for entry or exit, in the business. Consumers and producers are well aware of the market situation.

Answer 7

Chapter 11, Problem 1DQ

To determine

Pure competition in the long run and short run.

Answer 8

Expert Solution & Answer

Explanation of Solution

During a short run, the industry will have a precise number of companies. All of these will have a plant size that is set and is not in a position to be altered as it is there for a short run. Firms might shut down given the impression that it won't be making commodities during the short run, but they will not have adequate time to pay off its due obligations and their business will eventually close down.

In contrast, the industry, during the long run will have companies that are already in it and have ample time to either expand or minimize their size. Also, the company numbers in the industry can go up or come down as new companies enter or already present firms leave.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Economics Concept Introduction

Concept Introduction:

Pure Competition: In pure competition, the number of buyers and sellers are large. They are selling homogenous products. Price is fixed by the market force. An individual producer or consumer cannot influence the price. There is no restriction for entry or exit, in the business. Consumers and producers are well aware of the market situation.

Answer 12

Ch. 11.6 - Prob. 1QQ Ch. 11.6 - Prob. 2QQ Ch. 11.6 - Prob. 3QQ Ch. 11.6 - Prob. 4QQ Ch. 11 - Prob. 1DQ Ch. 11 - Prob. 2DQ Ch. 11 - Prob. 3DQ Ch. 11 - Prob. 4DQ Ch. 11 - Prob. 5DQ Ch. 11 - Prob. 6DQ

Pure competition in the long run and short run.

Pure competition in the long run and short run.

Explanation of Solution

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