Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506725
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Chapter 22, Problem 12CQ
To determine
The negative and positive effects of competition in the market.
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How does competition affect prices in a market system? How does it affect supply(what producers provide) and demand (what consumers want)?
How do firms or business in a competitive market decide what prices are and how does the economy look like? What if they are all selling the same product?
What is the importance of competition in markets?
Chapter 22 Solutions
Economics: Private and Public Choice (MindTap Course List)
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- How do firms in a competitive market work?arrow_forwardHow do price controls affect the workings of a perfectly competitive market? Use a supply demand diagram as part of your answer.arrow_forwardEvaluate and explain the following statement: The market system is a profit-and-loss system.arrow_forward
- Define a perfectly competitive market. A. Market that makes it possible for firms or businesses to reduce the quality of their products or services in order to cut their own costs B. Market model where many firms and businesses compete against each other to create an innovative product at the best cost, which ultimately benefits society C. Market where a firm or business has no competition in manufacturing a good or providing a service D. Market with few sellers and many buyersarrow_forwardAre US markets becoming less competitive and, therefore, less efficient?arrow_forwardA competitive market system is efficient. Discuss and explain this statement in detail. Your answer may include diagrams.arrow_forward
- Why can it be difficult to decide what a “market” is for purposes of measuring competition?arrow_forwardIf a technological advance lowers a firm's production costs, why do prices typically fall?Shouldn't the firm maintain the same price and earn economic profit?arrow_forwardAnswer the following questions. 1. In the year 2000, the town of Cuenca in Batangas did not have mountain resorts. Because of the influx of mountaineers to Mount Maculot during weekends, there are now five resorts operating in the said town and more than 10 resorts in nearby towns. All these resorts offer the same amenities-swimming pools and affordable lodgings. What feature of competitive markets does this demonstrate? Explain your answer.arrow_forward
- Everyone shops for things they need for themselves and for gifts for others. Imagine you are taking an online class, and you are looking to buy a new computer because your old one died. The class starts in two days. The market for computers is very competitive. There are several brands that have similar characteristics, such as storage capacity, processor speed, number of USB ports, etc., but you have owned one that you liked, and you want to buy that same brand, the X-Mark. You have a budget of $1,750. One popular store has the brand you like on sale for $999.99 because other stores sell them for that price. You have a friend at that store who tells you that the store paid $925 for that computer. Please evaluate and explain the willingness to pay, consumer surplus (calculate), demand, producer surplus (calculate), cost, and willingness to sell this transaction. Define these terms in your explanation, not as separate definitions. Incorporate the meaning into your narrative so that…arrow_forwardThe graphs below show the world and Chinese Beef, Pork and Rabbit/Dog meat markets before the Swine Flu hits China. The world pork and beef markets does not include the Chinese markets. Notice that the world's meat markets are in long run equilibrium where the price of beef and pork are the same in China and the World. Outside of China no one eats dog and rabbit meat only the dog and rabbit market in China is depicted. pick from the bold answer choices below. also look at the graphs bellow.---> In China, Pork is normal good or inferior good, and dog meat is normal or inferior, and In the world, beef and pork are inferior or normal goods? The chart below shows historical change in GDP per capita in China from 1960 to 2014. Look at the image bellow. The Change in the World illustrated in the chart is an increase in the price of related good, a decrease in price in related goods, an increase in Chinese income, or a decrease in Chinese income?arrow_forwardWhat are the characteristics of the different market structures ?arrow_forward
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