Bundle: Principles of Economics, 8th + MindTap Economics, 1 term (6 months) Printed Access Card
8th Edition
ISBN: 9781337378710
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Question
Chapter 14, Problem 8QR
To determine
The competitive firm’s supply curve is more elastic in the short run or the long run.
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In a competitive market, are market supply curves
typically more elastic in the short run or in the long
run? Explain within 40 words.
Explain how demand is seen by a purely competitive seller.
In a market this is highly competitive with little product differentiation and easy market entry, prices tend to be
Group of answer choices
a. Marginal
b. Elastic
c. Inelastic
d. Static
Chapter 14 Solutions
Bundle: Principles of Economics, 8th + MindTap Economics, 1 term (6 months) Printed Access Card
Ch. 14.1 - Prob. 1QQCh. 14.2 - How does a competitive firm determine its...Ch. 14.3 - Prob. 3QQCh. 14 - Prob. 1CQQCh. 14 - Prob. 2CQQCh. 14 - Prob. 3CQQCh. 14 - Prob. 4CQQCh. 14 - Prob. 5CQQCh. 14 - Prob. 6CQQCh. 14 - Prob. 1QR
Ch. 14 - Prob. 2QRCh. 14 - Prob. 3QRCh. 14 - Prob. 4QRCh. 14 - Prob. 5QRCh. 14 - Prob. 6QRCh. 14 - Prob. 7QRCh. 14 - Prob. 8QRCh. 14 - Prob. 1PACh. 14 - Prob. 2PACh. 14 - Prob. 3PACh. 14 - Prob. 4PACh. 14 - Prob. 5PACh. 14 - A firm in a competitive market receives 500 in...Ch. 14 - Prob. 7PACh. 14 - Prob. 8PACh. 14 - Prob. 9PACh. 14 - Prob. 10PACh. 14 - Suppose that each firm in a competitive industry...
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- 1arrow_forwardComment on the following statement: “In the short run, Mr. Mohammed, a seller in the Fruit& Vegetable Market in Al-Aweer, faces a demand curve that is simply a horizontalline at themarket equilibrium price. In other words, competitive sellers, in this market, face perfectlyelastic demand in the short run.”arrow_forwardAssistance required pleasearrow_forward
- explain your answers in detail and use graphs whenever appropriate: The market for rental cars is very competitive. How would the following developments affect the quantity of car rentals that a typical rental car company wants to supply in the short run? a. With the easing of fears about Covid 19, people are more excited to travel than before. b. Local governments reduce the yearly fee that rental car companies have to pay for their facilities. Note, these fees do not vary with how many cars the company rents. c. Rental car companies have to pay higher wages for their workers. Suppose that initially the market for rental cars is in long-run equilibrium. a. What does the fall in the yearly fee rental car companies have to pay for their facilities do to the profits of a typical rental car company in the short run? b. What will happen to the equilibrium price and quantity of rental cars in the long run? Why? What will happen to the profits of a typical rental car company in the long run?arrow_forwardSmall businesses typically do not observe the demand curves for the products they sell. For example, a local bakery could not draw the demand curve for its loaves of sourdough bread. Without this important information, how would the local bakery maximize its revenue?arrow_forwardEvery House in a small town has a well that provides water at no cost. However, if the town wants more than 10,000 gallons a day, it has to buy extra water from firms located outside of the town. The town currently consumes 9,000 gallons per day. a. Draw a linear demand curve b. The firm's supply curve is linear and starts at the origin. Draw the market supply curve, which includes the supply from the town's well. c. Show the equilibrium. What is the equilibrium quantity? What is the equilibrium price? Explain Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forward
- Consider the perfectly competitive spice market. At the equilibrium price, the elasticity of market supply is 1.34 and the elasticity of demand is 0.44. Spice is a normal good. An increase in incomes cause the market PRICE of spices to rise by 2%. What is the percentage change in market QUANTITY?arrow_forwardPrice elasticity of demand tends to be larger in the long run than in the short run. Which of the following is a reason that this statement is true? a. Over time, peoples incomes rise. b. If price rises, over time, producers will be able to offer more substitutes. c. Over time, the good will become a smaller and smaller share of peoples budgets. d. People see fewer and fewer substitutes for the good in the long run.arrow_forwardThe market for paperback detective novels is perfectly competitive. Market Demand is given by Q=106-7P. Market Supply is given by P=5+2Q. What is market QUANTITY? Enter a number only. Remember, fractions of goods are possible.arrow_forward
- What can you conclude about the price elasticity of demand in each of the following statements? a. "The pizza delivery business in this town is very competitive. I'd lose half my customers if I raised the price by as little as 10%." b. "I owned both of the two Jerry Garcia autographed lithographs in existence. I sold one on eBay for a high price. But when I sold the second one, the price dropped by 80%." c. "My economics professor has chosen to use the Krugman/Wells textbook for this class. I have no choice but to buy this book."arrow_forwardB. The supply of zucchini is very elastic in the short run. Draw a diagram that shows how the equilibrium price and quantity change as demand changes due to a food safety scare affecting yellow squasharrow_forwardI'd like help on all the questionsarrow_forward
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