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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Q1. (Chap 1: Game Theory.) In the simultaneous games below player 1 is choosing between Top and Bottom, while player 2 is choosing between Left and Right. In each cell the first number is the payoff to player 1 and the second is the payoff to player 2. Part A: Player 1 Top Bottom Player 2 Left 25, 22 Right 27,23 26,21 28, 22 (A1) Does player 1 have a dominant strategy? (Yes/No) If your answer is yes, which one is it? (Top/Bottom) (A2) Does player 2 have a dominant strategy? (Yes/No.) If your answer is yes, which one is it? (Left/Right.) (A3) Can you solve this game by using the dominant strategy method? (Yes/No) If your answer is yes, what is the solution?

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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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