The characteristic of the perfect competitive firm.

Question

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Answer 1

Question

Chapter 14, Problem 1CQQ

To determine

To determine: The characteristic of the perfect competitive firm.

Expert Solution & Answer

Answer to Problem 1CQQ

Answer:

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.

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Use the following table to work Problems 5 to 9. Minnie's Mineral Springs, a single-price monopoly, faces the market demand schedule: Price Quantity demanded (dollars per bottle) 10 8 (bottles per hour) 0 1 6 2 4 3 2 4 0 5 5. a. Calculate Minnie's total revenue schedule. b. Calculate its marginal revenue schedule. 6. a. Draw a graph of the market demand curve and Minnie's marginal revenue curve. b. Why is Minnie's marginal revenue less than the price? 7. a. At what price is Minnie's total revenue maxi- mized? b. Over what range of prices is the demand for water from Minnie's Mineral Springs elastic? 8. Why will Minnie not produce a quantity at which the market demand for water is inelastic?

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Answer 2

Question

Chapter 14, Problem 1CQQ

To determine

To determine: The characteristic of the perfect competitive firm.

Expert Solution & Answer

Answer to Problem 1CQQ

Answer:

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.

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

Answer 3

Question

Chapter 14, Problem 1CQQ

To determine

To determine: The characteristic of the perfect competitive firm.

Expert Solution & Answer

Answer to Problem 1CQQ

Answer:

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 14, Problem 1CQQ

To determine

To determine: The characteristic of the perfect competitive firm.

Expert Solution & Answer

Answer to Problem 1CQQ

Answer:

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 14, Problem 1CQQ

To determine

To determine: The characteristic of the perfect competitive firm.

Expert Solution & Answer

Answer to Problem 1CQQ

Answer:

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 14, Problem 1CQQ

To determine

To determine: The characteristic of the perfect competitive firm.

Expert Solution & Answer

Answer to Problem 1CQQ

Answer:

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 14, Problem 1CQQ

To determine

To determine: The characteristic of the perfect competitive firm.

Answer 8

Expert Solution & Answer

Answer to Problem 1CQQ

Answer:

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. 14.1 - Prob. 1QQ Ch. 14.2 - How does a competitive firm determine its...Ch. 14.3 - Prob. 3QQ Ch. 14 - Prob. 1CQQ Ch. 14 - Prob. 2CQQ Ch. 14 - Prob. 3CQQ Ch. 14 - Prob. 4CQQ Ch. 14 - Prob. 5CQQ Ch. 14 - Prob. 6CQQ Ch. 14 - Prob. 1QR

The characteristic of the perfect competitive firm.

To determine: The characteristic of the perfect competitive firm.

Answer to Problem 1CQQ

Explanation of Solution

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Chapter 14 Solutions