The characteristic of the perfect competitive firm.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 13, Problem 1CQQ

To determine

The characteristic of the perfect competitive firm.

Expert Solution & Answer

Answer to Problem 1CQQ

Option ‘c’ is correct.

Explanation of Solution

Option (c):

The competitive firm deals with the large number of buyers and sellers who trade homogeneous commodities, and the price is fixed by the market supply and demand forces. Thus, the firm is considered as a price taker. Thus, option ‘c’ is correct.

Option (a):

A profit-maximizing price is set at the point where the marginal revenue of the firm is equal to marginal cost. But in the competitive market, price is set by the equilibrium between the market demand and supply. Thus, option ‘a’ is incorrect.

Option (b):

Undercut price is done in an oligopoly. Thus, option ‘b’ is incorrect.

Option (d):

The largest market share is the driven motive for the managers whose remuneration is based on the sales revenue. Thus, option ‘d’ is incorrect.

Economics Concept Introduction

Concept introduction:

Perfect competitive firm: Perfect competition refers to the market structure featuring more number of sellers and buyers in the market where the firm can sell the homogenous products.

Want to see more full solutions like this?

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

Students have asked these similar questions

Explain and evaluate the impact of legislation on the U.S. criminal justice system, specifically on the prison population and its impact on poverty and the U.S. economy. Include significant elements and limitations such as the War on Drugs and the First Step Act.

Given the following petroleum tax details, calculate the marginal tax rate and explain its significance: Total Revenue: $500 million Cost of Operations: $200 million Tax Rate: 40% Additional Royalty: 5% Profit-Based Tax: 10%

Use a game tree to illustrate why an aircraft manufacturer may price below the current marginal cost in the short run if it has a steep learning curve. (Hint: Show that learning by doing lowers its cost in the second period.) Part 2 Assume for simplicity the game tree is illustrated in the figure to the right. Pricing below marginal cost reduces profits but gives the incumbent a cost advantage over potential rivals. What is the subgame perfect Nash equilibrium?

Answer 2

Question

Chapter 13, Problem 1CQQ

To determine

The characteristic of the perfect competitive firm.

Expert Solution & Answer

Answer to Problem 1CQQ

Option ‘c’ is correct.

Explanation of Solution

Option (c):

The competitive firm deals with the large number of buyers and sellers who trade homogeneous commodities, and the price is fixed by the market supply and demand forces. Thus, the firm is considered as a price taker. Thus, option ‘c’ is correct.

Option (a):

A profit-maximizing price is set at the point where the marginal revenue of the firm is equal to marginal cost. But in the competitive market, price is set by the equilibrium between the market demand and supply. Thus, option ‘a’ is incorrect.

Option (b):

Undercut price is done in an oligopoly. Thus, option ‘b’ is incorrect.

Option (d):

The largest market share is the driven motive for the managers whose remuneration is based on the sales revenue. Thus, option ‘d’ is incorrect.

Economics Concept Introduction

Concept introduction:

Perfect competitive firm: Perfect competition refers to the market structure featuring more number of sellers and buyers in the market where the firm can sell the homogenous products.

Want to see more full solutions like this?

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

Answer 3

Question

Chapter 13, Problem 1CQQ

To determine

The characteristic of the perfect competitive firm.

Expert Solution & Answer

Answer to Problem 1CQQ

Option ‘c’ is correct.

Explanation of Solution

Option (c):

The competitive firm deals with the large number of buyers and sellers who trade homogeneous commodities, and the price is fixed by the market supply and demand forces. Thus, the firm is considered as a price taker. Thus, option ‘c’ is correct.

Option (a):

A profit-maximizing price is set at the point where the marginal revenue of the firm is equal to marginal cost. But in the competitive market, price is set by the equilibrium between the market demand and supply. Thus, option ‘a’ is incorrect.

Option (b):

Undercut price is done in an oligopoly. Thus, option ‘b’ is incorrect.

Option (d):

The largest market share is the driven motive for the managers whose remuneration is based on the sales revenue. Thus, option ‘d’ is incorrect.

Economics Concept Introduction

Concept introduction:

Perfect competitive firm: Perfect competition refers to the market structure featuring more number of sellers and buyers in the market where the firm can sell the homogenous products.

Want to see more full solutions like this?

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

Answer 4

Question

Chapter 13, Problem 1CQQ

To determine

The characteristic of the perfect competitive firm.

Expert Solution & Answer

Answer to Problem 1CQQ

Option ‘c’ is correct.

Explanation of Solution

Option (c):

The competitive firm deals with the large number of buyers and sellers who trade homogeneous commodities, and the price is fixed by the market supply and demand forces. Thus, the firm is considered as a price taker. Thus, option ‘c’ is correct.

Option (a):

A profit-maximizing price is set at the point where the marginal revenue of the firm is equal to marginal cost. But in the competitive market, price is set by the equilibrium between the market demand and supply. Thus, option ‘a’ is incorrect.

Option (b):

Undercut price is done in an oligopoly. Thus, option ‘b’ is incorrect.

Option (d):

The largest market share is the driven motive for the managers whose remuneration is based on the sales revenue. Thus, option ‘d’ is incorrect.

Economics Concept Introduction

Concept introduction:

Perfect competitive firm: Perfect competition refers to the market structure featuring more number of sellers and buyers in the market where the firm can sell the homogenous products.

Want to see more full solutions like this?

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

Answer 5

Chapter 13, Problem 1CQQ

To determine

The characteristic of the perfect competitive firm.

Expert Solution & Answer

Answer to Problem 1CQQ

Option ‘c’ is correct.

Explanation of Solution

Option (c):

The competitive firm deals with the large number of buyers and sellers who trade homogeneous commodities, and the price is fixed by the market supply and demand forces. Thus, the firm is considered as a price taker. Thus, option ‘c’ is correct.

Option (a):

A profit-maximizing price is set at the point where the marginal revenue of the firm is equal to marginal cost. But in the competitive market, price is set by the equilibrium between the market demand and supply. Thus, option ‘a’ is incorrect.

Option (b):

Undercut price is done in an oligopoly. Thus, option ‘b’ is incorrect.

Option (d):

The largest market share is the driven motive for the managers whose remuneration is based on the sales revenue. Thus, option ‘d’ is incorrect.

Economics Concept Introduction

Concept introduction:

Perfect competitive firm: Perfect competition refers to the market structure featuring more number of sellers and buyers in the market where the firm can sell the homogenous products.

Answer 6

Chapter 13, Problem 1CQQ

To determine

The characteristic of the perfect competitive firm.

Expert Solution & Answer

Answer to Problem 1CQQ

Option ‘c’ is correct.

Explanation of Solution

Option (c):

The competitive firm deals with the large number of buyers and sellers who trade homogeneous commodities, and the price is fixed by the market supply and demand forces. Thus, the firm is considered as a price taker. Thus, option ‘c’ is correct.

Option (a):

A profit-maximizing price is set at the point where the marginal revenue of the firm is equal to marginal cost. But in the competitive market, price is set by the equilibrium between the market demand and supply. Thus, option ‘a’ is incorrect.

Option (b):

Undercut price is done in an oligopoly. Thus, option ‘b’ is incorrect.

Option (d):

The largest market share is the driven motive for the managers whose remuneration is based on the sales revenue. Thus, option ‘d’ is incorrect.

Economics Concept Introduction

Concept introduction:

Perfect competitive firm: Perfect competition refers to the market structure featuring more number of sellers and buyers in the market where the firm can sell the homogenous products.

Answer 7

Chapter 13, Problem 1CQQ

To determine

The characteristic of the perfect competitive firm.

Answer 8

Expert Solution & Answer

Answer to Problem 1CQQ

Option ‘c’ is correct.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Explanation of Solution

Option (c):

The competitive firm deals with the large number of buyers and sellers who trade homogeneous commodities, and the price is fixed by the market supply and demand forces. Thus, the firm is considered as a price taker. Thus, option ‘c’ is correct.

Option (a):

A profit-maximizing price is set at the point where the marginal revenue of the firm is equal to marginal cost. But in the competitive market, price is set by the equilibrium between the market demand and supply. Thus, option ‘a’ is incorrect.

Option (b):

Undercut price is done in an oligopoly. Thus, option ‘b’ is incorrect.

Option (d):

The largest market share is the driven motive for the managers whose remuneration is based on the sales revenue. Thus, option ‘d’ is incorrect.

Answer 12

Economics Concept Introduction

Concept introduction:

Perfect competitive firm: Perfect competition refers to the market structure featuring more number of sellers and buyers in the market where the firm can sell the homogenous products.

Answer 13

Ch. 13.1 - Prob. 1QQ Ch. 13.2 - How does a competitive firm determine its...Ch. 13.3 - Prob. 3QQ Ch. 13 - Prob. 1CQQ Ch. 13 - Prob. 2CQQ Ch. 13 - Prob. 3CQQ Ch. 13 - Prob. 4CQQ Ch. 13 - Prob. 5CQQ Ch. 13 - Prob. 6CQQ Ch. 13 - Prob. 1QR

The characteristic of the perfect competitive firm.

Solution Summary: The author explains the characteristic of the perfect competitive firm, which deals with the large number of buyers and sellers who trade homogeneous commodities.

The characteristic of the perfect competitive firm.

Answer to Problem 1CQQ

Explanation of Solution

Want to see more full solutions like this?

Chapter 13 Solutions