Economics: Private and Public Choice (MindTap Course List)
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 9CQ
To determine

The effects of competition among firms that leads to shut down condition.

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Is a firm that satisfies the immediate needs and wants of target markets always doing what’s best for its consumers in the long run?
George​ Stigler, "Perfect​ Competition, Historically​ Contemplated," Journal of Political Economy​,Vol.​ 55, No.​ 1, (February​ 1957), pp.​ 1-17.   Despite the fact that few firms sell identical products in markets where there are no barriers to​ entry, economists believe that the model of perfect competition is important because     A. economists prefer studying theoretical markets instead of actual markets.   B. all markets eventually become perfectly competitive.   C. it is a benchmark—a market with the maximum possible competition—that economists use to evaluate actual markets that are not perfectly competitive.   D. this is the type of market that our business laws protect and promote.
What are the options available to a firm when the market demand exceeds capacity?
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