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

At the 8:10 café, there are equal numbers of two types of customers with the following values. The café owner cannot distinguish between the two types of students because many students without early classes arrive early anyway (that is she cannot price discriminate). Students with early classes Students without early classes Coffee 70 60 Banana 50 100 The MC of coffee is 10. The MC of a banana is 40. Is bundling more profitable than selling separately? HINT: if you sell the bundle, can you make more by offering coffee separately? If so, what price should be charged for the bundle? (Show calculations)

Your marketing department has identified the following customer demographics in the following table. Construct a demand curve and determine the profit maximizing price as well as the expected profit if MC=$1. The number of customers in the target population is 10,000. Use the following demand data: Group Value Frequency Baby boomers $5 20% Generation X $4 10% Generation Y $3 10% `Tweeners $2 10% Seniors $2 10% Others $0 40%

Your marketing department has identified the following customer demographics in the following table. Construct a demand curve and determine the profit maximizing price as well as the expected profit if MC=$1. The number of customers in the target population is 10,000. Group Value Frequency Baby boomers $5 20% Generation X $4 10% Generation Y $3 10% `Tweeners $2 10% Seniors $2 10% Others $0 40% ur marketing department has identified the following customer demographics in the following table. Construct a demand curve and determine the profit maximizing price as well as the expected profit if MC=$1. The number of customers in the target population is 10,000.

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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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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