To answer: What is a competitive market and how it is described by the supply and demand model? Concept Introduction: Competitive market : The competitive market is a market where there is large number of buyers and sellers in the, the sellers are profit motive and the buyers want to maximise their satisfaction. In a competitive market no single produce can influence the price of the commodities. If one producer increases the price of his good no one will follow him and the producer may incur losses. In a perfectly competitive market the firms will be selling homogenous product Explanation: The competitive market is a place where there are large number of buyers and sellers in the economy. And they are selling homogenous products in the economy. The sellers are profit oriented and the buyers want maximum satisfaction from the products. There is rivalry in the competitive market the actions of one firm affects the decision of another firm so it leads to rivalry in the markets. Another feature of competitive market is excludability. The firms may exclude the consumers from enjoying their goods or service for an example the movies are only shown to the persons who buy movie tickets, if there is no excludability the consumers become free riders. Another feature of competitive market is the available information is fully reflected in the market for example there is report that hamburger consumption creates more health problems to the people, so due to this report there will be decreased demand for hamburgers in the market. So the available information is fully reflected in the market. The very important feature of competitive market is there is no barriers to entry that means firms can enter and leave the market at any time, there is complete freedom of firms to enter or leave the market. The above graph shows the supply and demand model in a competitive market, the demand curve will be downward sloping one indicates the negative relationship between the price and quantity demanded, if the prices are high the people will buy less of the product. The supply curve will be upward sloping one indicates the direct relationship between demand and supply. If the prices are high the producers will supply more of their products in the market. The intersection between the demand and supply curve is the equilibrium where the demand and supply are equal. There will be a surplus in the economy when the supply of goods and services exceeds the demand for goods and services and there will be also shortages in the economy when there is demand for goods and services exceeds the supply of goods and services. The shifts in the demand curve is shown by the above graph, a right ward shift from D to D1 shows increase in the quantity demanded of the commodity and the left ward shift from D to D2 shows the decrease in the quantity demanded. Changes in the price of commodity can only create movement along the demand curve and it cannot shift the demand curve, changes in income, tastes and preferences, fashion, changes in the prices of other goods can shift the demand curve. The shifts in the supply curve is shown by the above graph a right ward shift from S to S1 shows the increase in the quantity supplied and a leftward shift from S to S2 shows the decrease in the quantity supplied. Changes in input prices, expectations, technology can shift the supply curve; price only can result in a movement in the supply curve.

Question

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Answer 1

Question

Chapter 3, Problem aWYWL

To determine

To answer:

What is a competitive market and how it is described by the supply and demand model?

Concept Introduction:

Competitive market: The competitive market is a market where there is large number of buyers and sellers in the, the sellers are profit motive and the buyers want to maximise their satisfaction. In a competitive market no single produce can influence the price of the commodities. If one producer increases the price of his good no one will follow him and the producer may incur losses. In a perfectly competitive market the firms will be selling homogenous product

Explanation:

The competitive market is a place where there are large number of buyers and sellers in the economy. And they are selling homogenous products in the economy. The sellers are profit oriented and the buyers want maximum satisfaction from the products. There is rivalry in the competitive market the actions of one firm affects the decision of another firm so it leads to rivalry in the markets.

Another feature of competitive market is excludability. The firms may exclude the consumers from enjoying their goods or service for an example the movies are only shown to the persons who buy movie tickets, if there is no excludability the consumers become free riders. Another feature of competitive market is the available information is fully reflected in the market for example there is report that hamburger consumption creates more health problems to the people, so due to this report there will be decreased demand for hamburgers in the market. So the available information is fully reflected in the market. The very important feature of competitive market is there is no barriers to entry that means firms can enter and leave the market at any time, there is complete freedom of firms to enter or leave the market.

The above graph shows the supply and demand model in a competitive market, the demand curve will be downward sloping one indicates the negative relationship between the price and quantity demanded, if the prices are high the people will buy less of the product. The supply curve will be upward sloping one indicates the direct relationship between demand and supply. If the prices are high the producers will supply more of their products in the market. The intersection between the demand and supply curve is the equilibrium where the demand and supply are equal. There will be a surplus in the economy when the supply of goods and services exceeds the demand for goods and services and there will be also shortages in the economy when there is demand for goods and services exceeds the supply of goods and services.

The shifts in the demand curve is shown by the above graph, a right ward shift from D to D1 shows increase in the quantity demanded of the commodity and the left ward shift from D to D2 shows the decrease in the quantity demanded. Changes in the price of commodity can only create movement along the demand curve and it cannot shift the demand curve, changes in income, tastes and preferences, fashion, changes in the prices of other goods can shift the demand curve.

The shifts in the supply curve is shown by the above graph a right ward shift from S to S1 shows the increase in the quantity supplied and a leftward shift from S to S2 shows the decrease in the quantity supplied. Changes in input prices, expectations, technology can shift the supply curve; price only can result in a movement in the supply curve.

Expert Solution & Answer

Explanation of Solution

The competitive market is a place where there are large number of buyers and sellers in the economy. And they are selling homogenous products in the economy. The sellers are profit oriented and the buyers want maximum satisfaction from the products. There is rivalry in the competitive market the actions of one firm affects the decision of another firm so it leads to rivalry in the markets.

Another feature of competitive market is excludability. The firms may exclude the consumers from enjoying their goods or service for an example the movies are only shown to the persons who buy movie tickets, if there is no excludability the consumers become free riders. Another feature of competitive market is the available information is fully reflected in the market for example there is report that hamburger consumption creates more health problems to the people, so due to this report there will be decreased demand for hamburgers in the market. So the available information is fully reflected in the market. The very important feature of competitive market is there is no barriers to entry that means firms can enter and leave the market at any time, there is complete freedom of firms to enter or leave the market.

Microeconomics:, Chapter 3, Problem aWYWL , additional homework tip 4

The above graph shows the supply and demand model in a competitive market, the demand curve will be downward sloping one indicates the negative relationship between the price and quantity demanded, if the prices are high the people will buy less of the product. The supply curve will be upward sloping one indicates the direct relationship between demand and supply. If the prices are high the producers will supply more of their products in the market. The intersection between the demand and supply curve is the equilibrium where the demand and supply are equal. There will be a surplus in the economy when the supply of goods and services exceeds the demand for goods and services and there will be also shortages in the economy when there is demand for goods and services exceeds the supply of goods and services.

Microeconomics:, Chapter 3, Problem aWYWL , additional homework tip 5

The shifts in the demand curve is shown by the above graph, a right ward shift from D to D1 shows increase in the quantity demanded of the commodity and the left ward shift from D to D2 shows the decrease in the quantity demanded. Changes in the price of commodity can only create movement along the demand curve and it cannot shift the demand curve, changes in income, tastes and preferences, fashion, changes in the prices of other goods can shift the demand curve.

Microeconomics:, Chapter 3, Problem aWYWL , additional homework tip 6

The shifts in the supply curve is shown by the above graph a right ward shift from S to S1 shows the increase in the quantity supplied and a leftward shift from S to S2 shows the decrease in the quantity supplied. Changes in input prices, expectations, technology can shift the supply curve; price only can result in a movement in the supply curve.

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Problem 3 You are given the following demand for European luxury automobiles: Q=1,000 P-0.5.2/1.6 where P-Price of European luxury cars PA = Price of American luxury cars P, Price of Japanese luxury cars I= Annual income of car buyers Assume that each of the coefficients is statistically significant (i.e., that they passed the t-test). On the basis of the information given, answer the following questions 1. Comment on the degree of substitutability between European and American luxury cars and between European and Japanese luxury cars. Explain some possible reasons for the results in the equation. 2. Comment on the coefficient for the income variable. Is this result what you would expect? Explain. 3. Comment on the coefficient of the European car price variable. Is that what you would expect? Explain.

Problem 2: A manufacturer of computer workstations gathered average monthly sales figures from its 56 branch offices and dealerships across the country and estimated the following demand for its product: Q=+15,000-2.80P+150A+0.3P+0.35Pm+0.2Pc (5,234) (1.29) (175) (0.12) (0.17) (0.13) R²=0.68 SER 786 F=21.25 The variables and their assumed values are P = Price of basic model = 7,000 Q==Quantity A = Advertising expenditures (in thousands) = 52 P = Average price of a personal computer = 4,000 P. Average price of a minicomputer = 15,000 Pe Average price of a leading competitor's workstation = 8,000 1. Compute the elasticities for each variable. On this basis, discuss the relative impact that each variable has on the demand. What implications do these results have for the firm's marketing and pricing policies? 2. Conduct a t-test for the statistical significance of each variable. In each case, state whether a one-tail or two-tail test is required. What difference, if any, does it make to…

You are the manager of a large automobile dealership who wants to learn more about the effective- ness of various discounts offered to customers over the past 14 months. Following are the average negotiated prices for each month and the quantities sold of a basic model (adjusted for various options) over this period of time. 1. Graph this information on a scatter plot. Estimate the demand equation. What do the regression results indicate about the desirability of discounting the price? Explain. Month Price Quantity Jan. 12,500 15 Feb. 12,200 17 Mar. 11,900 16 Apr. 12,000 18 May 11,800 20 June 12,500 18 July 11,700 22 Aug. 12,100 15 Sept. 11,400 22 Oct. 11,400 25 Nov. 11,200 24 Dec. 11,000 30 Jan. 10,800 25 Feb. 10,000 28 2. What other factors besides price might be included in this equation? Do you foresee any difficulty in obtaining these additional data or incorporating them in the regression analysis?

Answer 2

Question

Chapter 3, Problem aWYWL

To determine

To answer:

What is a competitive market and how it is described by the supply and demand model?

Concept Introduction:

Competitive market: The competitive market is a market where there is large number of buyers and sellers in the, the sellers are profit motive and the buyers want to maximise their satisfaction. In a competitive market no single produce can influence the price of the commodities. If one producer increases the price of his good no one will follow him and the producer may incur losses. In a perfectly competitive market the firms will be selling homogenous product

Explanation:

The competitive market is a place where there are large number of buyers and sellers in the economy. And they are selling homogenous products in the economy. The sellers are profit oriented and the buyers want maximum satisfaction from the products. There is rivalry in the competitive market the actions of one firm affects the decision of another firm so it leads to rivalry in the markets.

Another feature of competitive market is excludability. The firms may exclude the consumers from enjoying their goods or service for an example the movies are only shown to the persons who buy movie tickets, if there is no excludability the consumers become free riders. Another feature of competitive market is the available information is fully reflected in the market for example there is report that hamburger consumption creates more health problems to the people, so due to this report there will be decreased demand for hamburgers in the market. So the available information is fully reflected in the market. The very important feature of competitive market is there is no barriers to entry that means firms can enter and leave the market at any time, there is complete freedom of firms to enter or leave the market.

The above graph shows the supply and demand model in a competitive market, the demand curve will be downward sloping one indicates the negative relationship between the price and quantity demanded, if the prices are high the people will buy less of the product. The supply curve will be upward sloping one indicates the direct relationship between demand and supply. If the prices are high the producers will supply more of their products in the market. The intersection between the demand and supply curve is the equilibrium where the demand and supply are equal. There will be a surplus in the economy when the supply of goods and services exceeds the demand for goods and services and there will be also shortages in the economy when there is demand for goods and services exceeds the supply of goods and services.

The shifts in the demand curve is shown by the above graph, a right ward shift from D to D1 shows increase in the quantity demanded of the commodity and the left ward shift from D to D2 shows the decrease in the quantity demanded. Changes in the price of commodity can only create movement along the demand curve and it cannot shift the demand curve, changes in income, tastes and preferences, fashion, changes in the prices of other goods can shift the demand curve.

The shifts in the supply curve is shown by the above graph a right ward shift from S to S1 shows the increase in the quantity supplied and a leftward shift from S to S2 shows the decrease in the quantity supplied. Changes in input prices, expectations, technology can shift the supply curve; price only can result in a movement in the supply curve.

Expert Solution & Answer

Explanation of Solution

The competitive market is a place where there are large number of buyers and sellers in the economy. And they are selling homogenous products in the economy. The sellers are profit oriented and the buyers want maximum satisfaction from the products. There is rivalry in the competitive market the actions of one firm affects the decision of another firm so it leads to rivalry in the markets.

Another feature of competitive market is excludability. The firms may exclude the consumers from enjoying their goods or service for an example the movies are only shown to the persons who buy movie tickets, if there is no excludability the consumers become free riders. Another feature of competitive market is the available information is fully reflected in the market for example there is report that hamburger consumption creates more health problems to the people, so due to this report there will be decreased demand for hamburgers in the market. So the available information is fully reflected in the market. The very important feature of competitive market is there is no barriers to entry that means firms can enter and leave the market at any time, there is complete freedom of firms to enter or leave the market.

Microeconomics:, Chapter 3, Problem aWYWL , additional homework tip 4

The above graph shows the supply and demand model in a competitive market, the demand curve will be downward sloping one indicates the negative relationship between the price and quantity demanded, if the prices are high the people will buy less of the product. The supply curve will be upward sloping one indicates the direct relationship between demand and supply. If the prices are high the producers will supply more of their products in the market. The intersection between the demand and supply curve is the equilibrium where the demand and supply are equal. There will be a surplus in the economy when the supply of goods and services exceeds the demand for goods and services and there will be also shortages in the economy when there is demand for goods and services exceeds the supply of goods and services.

Microeconomics:, Chapter 3, Problem aWYWL , additional homework tip 5

The shifts in the demand curve is shown by the above graph, a right ward shift from D to D1 shows increase in the quantity demanded of the commodity and the left ward shift from D to D2 shows the decrease in the quantity demanded. Changes in the price of commodity can only create movement along the demand curve and it cannot shift the demand curve, changes in income, tastes and preferences, fashion, changes in the prices of other goods can shift the demand curve.

Microeconomics:, Chapter 3, Problem aWYWL , additional homework tip 6

The shifts in the supply curve is shown by the above graph a right ward shift from S to S1 shows the increase in the quantity supplied and a leftward shift from S to S2 shows the decrease in the quantity supplied. Changes in input prices, expectations, technology can shift the supply curve; price only can result in a movement in the supply curve.

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 3, Problem aWYWL

To determine

To answer:

What is a competitive market and how it is described by the supply and demand model?

Concept Introduction:

Competitive market: The competitive market is a market where there is large number of buyers and sellers in the, the sellers are profit motive and the buyers want to maximise their satisfaction. In a competitive market no single produce can influence the price of the commodities. If one producer increases the price of his good no one will follow him and the producer may incur losses. In a perfectly competitive market the firms will be selling homogenous product

Explanation:

The competitive market is a place where there are large number of buyers and sellers in the economy. And they are selling homogenous products in the economy. The sellers are profit oriented and the buyers want maximum satisfaction from the products. There is rivalry in the competitive market the actions of one firm affects the decision of another firm so it leads to rivalry in the markets.

Another feature of competitive market is excludability. The firms may exclude the consumers from enjoying their goods or service for an example the movies are only shown to the persons who buy movie tickets, if there is no excludability the consumers become free riders. Another feature of competitive market is the available information is fully reflected in the market for example there is report that hamburger consumption creates more health problems to the people, so due to this report there will be decreased demand for hamburgers in the market. So the available information is fully reflected in the market. The very important feature of competitive market is there is no barriers to entry that means firms can enter and leave the market at any time, there is complete freedom of firms to enter or leave the market.

The above graph shows the supply and demand model in a competitive market, the demand curve will be downward sloping one indicates the negative relationship between the price and quantity demanded, if the prices are high the people will buy less of the product. The supply curve will be upward sloping one indicates the direct relationship between demand and supply. If the prices are high the producers will supply more of their products in the market. The intersection between the demand and supply curve is the equilibrium where the demand and supply are equal. There will be a surplus in the economy when the supply of goods and services exceeds the demand for goods and services and there will be also shortages in the economy when there is demand for goods and services exceeds the supply of goods and services.

The shifts in the demand curve is shown by the above graph, a right ward shift from D to D1 shows increase in the quantity demanded of the commodity and the left ward shift from D to D2 shows the decrease in the quantity demanded. Changes in the price of commodity can only create movement along the demand curve and it cannot shift the demand curve, changes in income, tastes and preferences, fashion, changes in the prices of other goods can shift the demand curve.

The shifts in the supply curve is shown by the above graph a right ward shift from S to S1 shows the increase in the quantity supplied and a leftward shift from S to S2 shows the decrease in the quantity supplied. Changes in input prices, expectations, technology can shift the supply curve; price only can result in a movement in the supply curve.

Expert Solution & Answer

Explanation of Solution

The competitive market is a place where there are large number of buyers and sellers in the economy. And they are selling homogenous products in the economy. The sellers are profit oriented and the buyers want maximum satisfaction from the products. There is rivalry in the competitive market the actions of one firm affects the decision of another firm so it leads to rivalry in the markets.

Another feature of competitive market is excludability. The firms may exclude the consumers from enjoying their goods or service for an example the movies are only shown to the persons who buy movie tickets, if there is no excludability the consumers become free riders. Another feature of competitive market is the available information is fully reflected in the market for example there is report that hamburger consumption creates more health problems to the people, so due to this report there will be decreased demand for hamburgers in the market. So the available information is fully reflected in the market. The very important feature of competitive market is there is no barriers to entry that means firms can enter and leave the market at any time, there is complete freedom of firms to enter or leave the market.

Microeconomics:, Chapter 3, Problem aWYWL , additional homework tip 4

The above graph shows the supply and demand model in a competitive market, the demand curve will be downward sloping one indicates the negative relationship between the price and quantity demanded, if the prices are high the people will buy less of the product. The supply curve will be upward sloping one indicates the direct relationship between demand and supply. If the prices are high the producers will supply more of their products in the market. The intersection between the demand and supply curve is the equilibrium where the demand and supply are equal. There will be a surplus in the economy when the supply of goods and services exceeds the demand for goods and services and there will be also shortages in the economy when there is demand for goods and services exceeds the supply of goods and services.

Microeconomics:, Chapter 3, Problem aWYWL , additional homework tip 5

The shifts in the demand curve is shown by the above graph, a right ward shift from D to D1 shows increase in the quantity demanded of the commodity and the left ward shift from D to D2 shows the decrease in the quantity demanded. Changes in the price of commodity can only create movement along the demand curve and it cannot shift the demand curve, changes in income, tastes and preferences, fashion, changes in the prices of other goods can shift the demand curve.

Microeconomics:, Chapter 3, Problem aWYWL , additional homework tip 6

The shifts in the supply curve is shown by the above graph a right ward shift from S to S1 shows the increase in the quantity supplied and a leftward shift from S to S2 shows the decrease in the quantity supplied. Changes in input prices, expectations, technology can shift the supply curve; price only can result in a movement in the supply curve.

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

Answer 4

Question

Chapter 3, Problem aWYWL

To determine

To answer:

What is a competitive market and how it is described by the supply and demand model?

Concept Introduction:

Competitive market: The competitive market is a market where there is large number of buyers and sellers in the, the sellers are profit motive and the buyers want to maximise their satisfaction. In a competitive market no single produce can influence the price of the commodities. If one producer increases the price of his good no one will follow him and the producer may incur losses. In a perfectly competitive market the firms will be selling homogenous product

Explanation:

The competitive market is a place where there are large number of buyers and sellers in the economy. And they are selling homogenous products in the economy. The sellers are profit oriented and the buyers want maximum satisfaction from the products. There is rivalry in the competitive market the actions of one firm affects the decision of another firm so it leads to rivalry in the markets.

Another feature of competitive market is excludability. The firms may exclude the consumers from enjoying their goods or service for an example the movies are only shown to the persons who buy movie tickets, if there is no excludability the consumers become free riders. Another feature of competitive market is the available information is fully reflected in the market for example there is report that hamburger consumption creates more health problems to the people, so due to this report there will be decreased demand for hamburgers in the market. So the available information is fully reflected in the market. The very important feature of competitive market is there is no barriers to entry that means firms can enter and leave the market at any time, there is complete freedom of firms to enter or leave the market.

The above graph shows the supply and demand model in a competitive market, the demand curve will be downward sloping one indicates the negative relationship between the price and quantity demanded, if the prices are high the people will buy less of the product. The supply curve will be upward sloping one indicates the direct relationship between demand and supply. If the prices are high the producers will supply more of their products in the market. The intersection between the demand and supply curve is the equilibrium where the demand and supply are equal. There will be a surplus in the economy when the supply of goods and services exceeds the demand for goods and services and there will be also shortages in the economy when there is demand for goods and services exceeds the supply of goods and services.

The shifts in the demand curve is shown by the above graph, a right ward shift from D to D1 shows increase in the quantity demanded of the commodity and the left ward shift from D to D2 shows the decrease in the quantity demanded. Changes in the price of commodity can only create movement along the demand curve and it cannot shift the demand curve, changes in income, tastes and preferences, fashion, changes in the prices of other goods can shift the demand curve.

The shifts in the supply curve is shown by the above graph a right ward shift from S to S1 shows the increase in the quantity supplied and a leftward shift from S to S2 shows the decrease in the quantity supplied. Changes in input prices, expectations, technology can shift the supply curve; price only can result in a movement in the supply curve.

Expert Solution & Answer

Explanation of Solution

The competitive market is a place where there are large number of buyers and sellers in the economy. And they are selling homogenous products in the economy. The sellers are profit oriented and the buyers want maximum satisfaction from the products. There is rivalry in the competitive market the actions of one firm affects the decision of another firm so it leads to rivalry in the markets.

Another feature of competitive market is excludability. The firms may exclude the consumers from enjoying their goods or service for an example the movies are only shown to the persons who buy movie tickets, if there is no excludability the consumers become free riders. Another feature of competitive market is the available information is fully reflected in the market for example there is report that hamburger consumption creates more health problems to the people, so due to this report there will be decreased demand for hamburgers in the market. So the available information is fully reflected in the market. The very important feature of competitive market is there is no barriers to entry that means firms can enter and leave the market at any time, there is complete freedom of firms to enter or leave the market.

Microeconomics:, Chapter 3, Problem aWYWL , additional homework tip 4

The above graph shows the supply and demand model in a competitive market, the demand curve will be downward sloping one indicates the negative relationship between the price and quantity demanded, if the prices are high the people will buy less of the product. The supply curve will be upward sloping one indicates the direct relationship between demand and supply. If the prices are high the producers will supply more of their products in the market. The intersection between the demand and supply curve is the equilibrium where the demand and supply are equal. There will be a surplus in the economy when the supply of goods and services exceeds the demand for goods and services and there will be also shortages in the economy when there is demand for goods and services exceeds the supply of goods and services.

Microeconomics:, Chapter 3, Problem aWYWL , additional homework tip 5

The shifts in the demand curve is shown by the above graph, a right ward shift from D to D1 shows increase in the quantity demanded of the commodity and the left ward shift from D to D2 shows the decrease in the quantity demanded. Changes in the price of commodity can only create movement along the demand curve and it cannot shift the demand curve, changes in income, tastes and preferences, fashion, changes in the prices of other goods can shift the demand curve.

Microeconomics:, Chapter 3, Problem aWYWL , additional homework tip 6

The shifts in the supply curve is shown by the above graph a right ward shift from S to S1 shows the increase in the quantity supplied and a leftward shift from S to S2 shows the decrease in the quantity supplied. Changes in input prices, expectations, technology can shift the supply curve; price only can result in a movement in the supply curve.

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 3, Problem aWYWL

To determine

To answer:

What is a competitive market and how it is described by the supply and demand model?

Concept Introduction:

Competitive market: The competitive market is a market where there is large number of buyers and sellers in the, the sellers are profit motive and the buyers want to maximise their satisfaction. In a competitive market no single produce can influence the price of the commodities. If one producer increases the price of his good no one will follow him and the producer may incur losses. In a perfectly competitive market the firms will be selling homogenous product

Explanation:

The competitive market is a place where there are large number of buyers and sellers in the economy. And they are selling homogenous products in the economy. The sellers are profit oriented and the buyers want maximum satisfaction from the products. There is rivalry in the competitive market the actions of one firm affects the decision of another firm so it leads to rivalry in the markets.

Another feature of competitive market is excludability. The firms may exclude the consumers from enjoying their goods or service for an example the movies are only shown to the persons who buy movie tickets, if there is no excludability the consumers become free riders. Another feature of competitive market is the available information is fully reflected in the market for example there is report that hamburger consumption creates more health problems to the people, so due to this report there will be decreased demand for hamburgers in the market. So the available information is fully reflected in the market. The very important feature of competitive market is there is no barriers to entry that means firms can enter and leave the market at any time, there is complete freedom of firms to enter or leave the market.

The above graph shows the supply and demand model in a competitive market, the demand curve will be downward sloping one indicates the negative relationship between the price and quantity demanded, if the prices are high the people will buy less of the product. The supply curve will be upward sloping one indicates the direct relationship between demand and supply. If the prices are high the producers will supply more of their products in the market. The intersection between the demand and supply curve is the equilibrium where the demand and supply are equal. There will be a surplus in the economy when the supply of goods and services exceeds the demand for goods and services and there will be also shortages in the economy when there is demand for goods and services exceeds the supply of goods and services.

The shifts in the demand curve is shown by the above graph, a right ward shift from D to D1 shows increase in the quantity demanded of the commodity and the left ward shift from D to D2 shows the decrease in the quantity demanded. Changes in the price of commodity can only create movement along the demand curve and it cannot shift the demand curve, changes in income, tastes and preferences, fashion, changes in the prices of other goods can shift the demand curve.

The shifts in the supply curve is shown by the above graph a right ward shift from S to S1 shows the increase in the quantity supplied and a leftward shift from S to S2 shows the decrease in the quantity supplied. Changes in input prices, expectations, technology can shift the supply curve; price only can result in a movement in the supply curve.

Expert Solution & Answer

Explanation of Solution

The competitive market is a place where there are large number of buyers and sellers in the economy. And they are selling homogenous products in the economy. The sellers are profit oriented and the buyers want maximum satisfaction from the products. There is rivalry in the competitive market the actions of one firm affects the decision of another firm so it leads to rivalry in the markets.

Another feature of competitive market is excludability. The firms may exclude the consumers from enjoying their goods or service for an example the movies are only shown to the persons who buy movie tickets, if there is no excludability the consumers become free riders. Another feature of competitive market is the available information is fully reflected in the market for example there is report that hamburger consumption creates more health problems to the people, so due to this report there will be decreased demand for hamburgers in the market. So the available information is fully reflected in the market. The very important feature of competitive market is there is no barriers to entry that means firms can enter and leave the market at any time, there is complete freedom of firms to enter or leave the market.

Microeconomics:, Chapter 3, Problem aWYWL , additional homework tip 4

The above graph shows the supply and demand model in a competitive market, the demand curve will be downward sloping one indicates the negative relationship between the price and quantity demanded, if the prices are high the people will buy less of the product. The supply curve will be upward sloping one indicates the direct relationship between demand and supply. If the prices are high the producers will supply more of their products in the market. The intersection between the demand and supply curve is the equilibrium where the demand and supply are equal. There will be a surplus in the economy when the supply of goods and services exceeds the demand for goods and services and there will be also shortages in the economy when there is demand for goods and services exceeds the supply of goods and services.

Microeconomics:, Chapter 3, Problem aWYWL , additional homework tip 5

The shifts in the demand curve is shown by the above graph, a right ward shift from D to D1 shows increase in the quantity demanded of the commodity and the left ward shift from D to D2 shows the decrease in the quantity demanded. Changes in the price of commodity can only create movement along the demand curve and it cannot shift the demand curve, changes in income, tastes and preferences, fashion, changes in the prices of other goods can shift the demand curve.

Microeconomics:, Chapter 3, Problem aWYWL , additional homework tip 6

The shifts in the supply curve is shown by the above graph a right ward shift from S to S1 shows the increase in the quantity supplied and a leftward shift from S to S2 shows the decrease in the quantity supplied. Changes in input prices, expectations, technology can shift the supply curve; price only can result in a movement in the supply curve.

Answer 6

Chapter 3, Problem aWYWL

To determine

To answer:

What is a competitive market and how it is described by the supply and demand model?

Concept Introduction:

Competitive market: The competitive market is a market where there is large number of buyers and sellers in the, the sellers are profit motive and the buyers want to maximise their satisfaction. In a competitive market no single produce can influence the price of the commodities. If one producer increases the price of his good no one will follow him and the producer may incur losses. In a perfectly competitive market the firms will be selling homogenous product

Explanation:

The competitive market is a place where there are large number of buyers and sellers in the economy. And they are selling homogenous products in the economy. The sellers are profit oriented and the buyers want maximum satisfaction from the products. There is rivalry in the competitive market the actions of one firm affects the decision of another firm so it leads to rivalry in the markets.

Another feature of competitive market is excludability. The firms may exclude the consumers from enjoying their goods or service for an example the movies are only shown to the persons who buy movie tickets, if there is no excludability the consumers become free riders. Another feature of competitive market is the available information is fully reflected in the market for example there is report that hamburger consumption creates more health problems to the people, so due to this report there will be decreased demand for hamburgers in the market. So the available information is fully reflected in the market. The very important feature of competitive market is there is no barriers to entry that means firms can enter and leave the market at any time, there is complete freedom of firms to enter or leave the market.

The above graph shows the supply and demand model in a competitive market, the demand curve will be downward sloping one indicates the negative relationship between the price and quantity demanded, if the prices are high the people will buy less of the product. The supply curve will be upward sloping one indicates the direct relationship between demand and supply. If the prices are high the producers will supply more of their products in the market. The intersection between the demand and supply curve is the equilibrium where the demand and supply are equal. There will be a surplus in the economy when the supply of goods and services exceeds the demand for goods and services and there will be also shortages in the economy when there is demand for goods and services exceeds the supply of goods and services.

The shifts in the demand curve is shown by the above graph, a right ward shift from D to D1 shows increase in the quantity demanded of the commodity and the left ward shift from D to D2 shows the decrease in the quantity demanded. Changes in the price of commodity can only create movement along the demand curve and it cannot shift the demand curve, changes in income, tastes and preferences, fashion, changes in the prices of other goods can shift the demand curve.

The shifts in the supply curve is shown by the above graph a right ward shift from S to S1 shows the increase in the quantity supplied and a leftward shift from S to S2 shows the decrease in the quantity supplied. Changes in input prices, expectations, technology can shift the supply curve; price only can result in a movement in the supply curve.

Expert Solution & Answer

Explanation of Solution

The competitive market is a place where there are large number of buyers and sellers in the economy. And they are selling homogenous products in the economy. The sellers are profit oriented and the buyers want maximum satisfaction from the products. There is rivalry in the competitive market the actions of one firm affects the decision of another firm so it leads to rivalry in the markets.

Another feature of competitive market is excludability. The firms may exclude the consumers from enjoying their goods or service for an example the movies are only shown to the persons who buy movie tickets, if there is no excludability the consumers become free riders. Another feature of competitive market is the available information is fully reflected in the market for example there is report that hamburger consumption creates more health problems to the people, so due to this report there will be decreased demand for hamburgers in the market. So the available information is fully reflected in the market. The very important feature of competitive market is there is no barriers to entry that means firms can enter and leave the market at any time, there is complete freedom of firms to enter or leave the market.

Microeconomics:, Chapter 3, Problem aWYWL , additional homework tip 4

The above graph shows the supply and demand model in a competitive market, the demand curve will be downward sloping one indicates the negative relationship between the price and quantity demanded, if the prices are high the people will buy less of the product. The supply curve will be upward sloping one indicates the direct relationship between demand and supply. If the prices are high the producers will supply more of their products in the market. The intersection between the demand and supply curve is the equilibrium where the demand and supply are equal. There will be a surplus in the economy when the supply of goods and services exceeds the demand for goods and services and there will be also shortages in the economy when there is demand for goods and services exceeds the supply of goods and services.

Microeconomics:, Chapter 3, Problem aWYWL , additional homework tip 5

The shifts in the demand curve is shown by the above graph, a right ward shift from D to D1 shows increase in the quantity demanded of the commodity and the left ward shift from D to D2 shows the decrease in the quantity demanded. Changes in the price of commodity can only create movement along the demand curve and it cannot shift the demand curve, changes in income, tastes and preferences, fashion, changes in the prices of other goods can shift the demand curve.

Microeconomics:, Chapter 3, Problem aWYWL , additional homework tip 6

The shifts in the supply curve is shown by the above graph a right ward shift from S to S1 shows the increase in the quantity supplied and a leftward shift from S to S2 shows the decrease in the quantity supplied. Changes in input prices, expectations, technology can shift the supply curve; price only can result in a movement in the supply curve.

Answer 7

Chapter 3, Problem aWYWL

To determine

To answer:

What is a competitive market and how it is described by the supply and demand model?

Concept Introduction:

Competitive market: The competitive market is a market where there is large number of buyers and sellers in the, the sellers are profit motive and the buyers want to maximise their satisfaction. In a competitive market no single produce can influence the price of the commodities. If one producer increases the price of his good no one will follow him and the producer may incur losses. In a perfectly competitive market the firms will be selling homogenous product

Explanation:

The competitive market is a place where there are large number of buyers and sellers in the economy. And they are selling homogenous products in the economy. The sellers are profit oriented and the buyers want maximum satisfaction from the products. There is rivalry in the competitive market the actions of one firm affects the decision of another firm so it leads to rivalry in the markets.

Another feature of competitive market is excludability. The firms may exclude the consumers from enjoying their goods or service for an example the movies are only shown to the persons who buy movie tickets, if there is no excludability the consumers become free riders. Another feature of competitive market is the available information is fully reflected in the market for example there is report that hamburger consumption creates more health problems to the people, so due to this report there will be decreased demand for hamburgers in the market. So the available information is fully reflected in the market. The very important feature of competitive market is there is no barriers to entry that means firms can enter and leave the market at any time, there is complete freedom of firms to enter or leave the market.

The above graph shows the supply and demand model in a competitive market, the demand curve will be downward sloping one indicates the negative relationship between the price and quantity demanded, if the prices are high the people will buy less of the product. The supply curve will be upward sloping one indicates the direct relationship between demand and supply. If the prices are high the producers will supply more of their products in the market. The intersection between the demand and supply curve is the equilibrium where the demand and supply are equal. There will be a surplus in the economy when the supply of goods and services exceeds the demand for goods and services and there will be also shortages in the economy when there is demand for goods and services exceeds the supply of goods and services.

The shifts in the demand curve is shown by the above graph, a right ward shift from D to D1 shows increase in the quantity demanded of the commodity and the left ward shift from D to D2 shows the decrease in the quantity demanded. Changes in the price of commodity can only create movement along the demand curve and it cannot shift the demand curve, changes in income, tastes and preferences, fashion, changes in the prices of other goods can shift the demand curve.

The shifts in the supply curve is shown by the above graph a right ward shift from S to S1 shows the increase in the quantity supplied and a leftward shift from S to S2 shows the decrease in the quantity supplied. Changes in input prices, expectations, technology can shift the supply curve; price only can result in a movement in the supply curve.

Answer 8

Expert Solution & Answer

Explanation of Solution

The competitive market is a place where there are large number of buyers and sellers in the economy. And they are selling homogenous products in the economy. The sellers are profit oriented and the buyers want maximum satisfaction from the products. There is rivalry in the competitive market the actions of one firm affects the decision of another firm so it leads to rivalry in the markets.

Another feature of competitive market is excludability. The firms may exclude the consumers from enjoying their goods or service for an example the movies are only shown to the persons who buy movie tickets, if there is no excludability the consumers become free riders. Another feature of competitive market is the available information is fully reflected in the market for example there is report that hamburger consumption creates more health problems to the people, so due to this report there will be decreased demand for hamburgers in the market. So the available information is fully reflected in the market. The very important feature of competitive market is there is no barriers to entry that means firms can enter and leave the market at any time, there is complete freedom of firms to enter or leave the market.

Microeconomics:, Chapter 3, Problem aWYWL , additional homework tip 4

The above graph shows the supply and demand model in a competitive market, the demand curve will be downward sloping one indicates the negative relationship between the price and quantity demanded, if the prices are high the people will buy less of the product. The supply curve will be upward sloping one indicates the direct relationship between demand and supply. If the prices are high the producers will supply more of their products in the market. The intersection between the demand and supply curve is the equilibrium where the demand and supply are equal. There will be a surplus in the economy when the supply of goods and services exceeds the demand for goods and services and there will be also shortages in the economy when there is demand for goods and services exceeds the supply of goods and services.

Microeconomics:, Chapter 3, Problem aWYWL , additional homework tip 5

The shifts in the demand curve is shown by the above graph, a right ward shift from D to D1 shows increase in the quantity demanded of the commodity and the left ward shift from D to D2 shows the decrease in the quantity demanded. Changes in the price of commodity can only create movement along the demand curve and it cannot shift the demand curve, changes in income, tastes and preferences, fashion, changes in the prices of other goods can shift the demand curve.

Microeconomics:, Chapter 3, Problem aWYWL , additional homework tip 6

The shifts in the supply curve is shown by the above graph a right ward shift from S to S1 shows the increase in the quantity supplied and a leftward shift from S to S2 shows the decrease in the quantity supplied. Changes in input prices, expectations, technology can shift the supply curve; price only can result in a movement in the supply curve.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Ch. 3 - Prob. aWYWL Ch. 3 - Prob. bWYWL Ch. 3 - Prob. cWYWL Ch. 3 - Prob. dWYWL Ch. 3 - Prob. eWYWL Ch. 3 - Prob. 1QFT Ch. 3 - Prob. 2QFT Ch. 3 - Prob. 3QFT Ch. 3 - Prob. 1P Ch. 3 - Prob. 2P

Explanation of Solution

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