The necessary conditions for perfect completion market to exist

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Answer 1

Question

Chapter 9, Problem 1QFR

To determine

The necessary conditions for perfect completion market to exist

Expert Solution & Answer

Explanation of Solution

In perfect competition market, neither a single producer nor a single consumer can determine the operation of this market. It offers efficiency in both allocation and production. The necessary conditions for this market to exist are:

A large number of buyers and sellers:
There are so many customers that one customer can purchase a very small portion of the market supply; likewise a single seller can provide a very small fraction of the total output too. Hence in relation to the sector it belongs, the size of the competitive firm is very small.
Homogenous products:
All suppliers provide a homogenous product in a perfect competition market, in simple words all the competitive firm's products are the same.
Perfect information:
Buyers, as well as sellers, have complete knowledge of the current market price. That is why in a perfect competition market there can only be one price.
No barriers to entry or exist:
A new business can freely enter into this particular type of market or an existing business can freely leave the industry in the longer term.
Cheap and efficient transportation:
Another feature of competitive market is low priced and efficient transport. Firms do not incur substantial costs in transporting goods in this type of market. This reduces the cost of the product and lessens the delays in the transportation of goods.

Economics Concept Introduction

Introduction:

A perfect competition market is one where a huge number of sellers compete with each other to fulfill the demands and requirements of a huge number of consumers. The brief idea of perfect competition market is given in the following diagram:

PRIN.OF ECON.ACCESS CODE, Chapter 9, Problem 1QFR

Figure - A

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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…

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Answer 2

Question

Chapter 9, Problem 1QFR

To determine

The necessary conditions for perfect completion market to exist

Expert Solution & Answer

Explanation of Solution

In perfect competition market, neither a single producer nor a single consumer can determine the operation of this market. It offers efficiency in both allocation and production. The necessary conditions for this market to exist are:

A large number of buyers and sellers:
There are so many customers that one customer can purchase a very small portion of the market supply; likewise a single seller can provide a very small fraction of the total output too. Hence in relation to the sector it belongs, the size of the competitive firm is very small.
Homogenous products:
All suppliers provide a homogenous product in a perfect competition market, in simple words all the competitive firm's products are the same.
Perfect information:
Buyers, as well as sellers, have complete knowledge of the current market price. That is why in a perfect competition market there can only be one price.
No barriers to entry or exist:
A new business can freely enter into this particular type of market or an existing business can freely leave the industry in the longer term.
Cheap and efficient transportation:
Another feature of competitive market is low priced and efficient transport. Firms do not incur substantial costs in transporting goods in this type of market. This reduces the cost of the product and lessens the delays in the transportation of goods.

Economics Concept Introduction

Introduction:

A perfect competition market is one where a huge number of sellers compete with each other to fulfill the demands and requirements of a huge number of consumers. The brief idea of perfect competition market is given in the following diagram:

PRIN.OF ECON.ACCESS CODE, Chapter 9, Problem 1QFR

Figure - A

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Answer 3

Question

Chapter 9, Problem 1QFR

To determine

The necessary conditions for perfect completion market to exist

Expert Solution & Answer

Explanation of Solution

In perfect competition market, neither a single producer nor a single consumer can determine the operation of this market. It offers efficiency in both allocation and production. The necessary conditions for this market to exist are:

A large number of buyers and sellers:
There are so many customers that one customer can purchase a very small portion of the market supply; likewise a single seller can provide a very small fraction of the total output too. Hence in relation to the sector it belongs, the size of the competitive firm is very small.
Homogenous products:
All suppliers provide a homogenous product in a perfect competition market, in simple words all the competitive firm's products are the same.
Perfect information:
Buyers, as well as sellers, have complete knowledge of the current market price. That is why in a perfect competition market there can only be one price.
No barriers to entry or exist:
A new business can freely enter into this particular type of market or an existing business can freely leave the industry in the longer term.
Cheap and efficient transportation:
Another feature of competitive market is low priced and efficient transport. Firms do not incur substantial costs in transporting goods in this type of market. This reduces the cost of the product and lessens the delays in the transportation of goods.

Economics Concept Introduction

Introduction:

A perfect competition market is one where a huge number of sellers compete with each other to fulfill the demands and requirements of a huge number of consumers. The brief idea of perfect competition market is given in the following diagram:

PRIN.OF ECON.ACCESS CODE, Chapter 9, Problem 1QFR

Figure - A

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Answer 4

Question

Chapter 9, Problem 1QFR

To determine

The necessary conditions for perfect completion market to exist

Expert Solution & Answer

Explanation of Solution

In perfect competition market, neither a single producer nor a single consumer can determine the operation of this market. It offers efficiency in both allocation and production. The necessary conditions for this market to exist are:

A large number of buyers and sellers:
There are so many customers that one customer can purchase a very small portion of the market supply; likewise a single seller can provide a very small fraction of the total output too. Hence in relation to the sector it belongs, the size of the competitive firm is very small.
Homogenous products:
All suppliers provide a homogenous product in a perfect competition market, in simple words all the competitive firm's products are the same.
Perfect information:
Buyers, as well as sellers, have complete knowledge of the current market price. That is why in a perfect competition market there can only be one price.
No barriers to entry or exist:
A new business can freely enter into this particular type of market or an existing business can freely leave the industry in the longer term.
Cheap and efficient transportation:
Another feature of competitive market is low priced and efficient transport. Firms do not incur substantial costs in transporting goods in this type of market. This reduces the cost of the product and lessens the delays in the transportation of goods.

Economics Concept Introduction

Introduction:

A perfect competition market is one where a huge number of sellers compete with each other to fulfill the demands and requirements of a huge number of consumers. The brief idea of perfect competition market is given in the following diagram:

PRIN.OF ECON.ACCESS CODE, Chapter 9, Problem 1QFR

Figure - A

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Answer 5

Chapter 9, Problem 1QFR

To determine

The necessary conditions for perfect completion market to exist

Expert Solution & Answer

Explanation of Solution

In perfect competition market, neither a single producer nor a single consumer can determine the operation of this market. It offers efficiency in both allocation and production. The necessary conditions for this market to exist are:

A large number of buyers and sellers:
There are so many customers that one customer can purchase a very small portion of the market supply; likewise a single seller can provide a very small fraction of the total output too. Hence in relation to the sector it belongs, the size of the competitive firm is very small.
Homogenous products:
All suppliers provide a homogenous product in a perfect competition market, in simple words all the competitive firm's products are the same.
Perfect information:
Buyers, as well as sellers, have complete knowledge of the current market price. That is why in a perfect competition market there can only be one price.
No barriers to entry or exist:
A new business can freely enter into this particular type of market or an existing business can freely leave the industry in the longer term.
Cheap and efficient transportation:
Another feature of competitive market is low priced and efficient transport. Firms do not incur substantial costs in transporting goods in this type of market. This reduces the cost of the product and lessens the delays in the transportation of goods.

Economics Concept Introduction

Introduction:

A perfect competition market is one where a huge number of sellers compete with each other to fulfill the demands and requirements of a huge number of consumers. The brief idea of perfect competition market is given in the following diagram:

PRIN.OF ECON.ACCESS CODE, Chapter 9, Problem 1QFR

Figure - A

Answer 6

Chapter 9, Problem 1QFR

To determine

The necessary conditions for perfect completion market to exist

Expert Solution & Answer

Explanation of Solution

In perfect competition market, neither a single producer nor a single consumer can determine the operation of this market. It offers efficiency in both allocation and production. The necessary conditions for this market to exist are:

A large number of buyers and sellers:
There are so many customers that one customer can purchase a very small portion of the market supply; likewise a single seller can provide a very small fraction of the total output too. Hence in relation to the sector it belongs, the size of the competitive firm is very small.
Homogenous products:
All suppliers provide a homogenous product in a perfect competition market, in simple words all the competitive firm's products are the same.
Perfect information:
Buyers, as well as sellers, have complete knowledge of the current market price. That is why in a perfect competition market there can only be one price.
No barriers to entry or exist:
A new business can freely enter into this particular type of market or an existing business can freely leave the industry in the longer term.
Cheap and efficient transportation:
Another feature of competitive market is low priced and efficient transport. Firms do not incur substantial costs in transporting goods in this type of market. This reduces the cost of the product and lessens the delays in the transportation of goods.

Economics Concept Introduction

Introduction:

A perfect competition market is one where a huge number of sellers compete with each other to fulfill the demands and requirements of a huge number of consumers. The brief idea of perfect competition market is given in the following diagram:

PRIN.OF ECON.ACCESS CODE, Chapter 9, Problem 1QFR

Figure - A

Answer 7

Chapter 9, Problem 1QFR

To determine

The necessary conditions for perfect completion market to exist

Answer 8

Expert Solution & Answer

Explanation of Solution

In perfect competition market, neither a single producer nor a single consumer can determine the operation of this market. It offers efficiency in both allocation and production. The necessary conditions for this market to exist are:

A large number of buyers and sellers:
There are so many customers that one customer can purchase a very small portion of the market supply; likewise a single seller can provide a very small fraction of the total output too. Hence in relation to the sector it belongs, the size of the competitive firm is very small.
Homogenous products:
All suppliers provide a homogenous product in a perfect competition market, in simple words all the competitive firm's products are the same.
Perfect information:
Buyers, as well as sellers, have complete knowledge of the current market price. That is why in a perfect competition market there can only be one price.
No barriers to entry or exist:
A new business can freely enter into this particular type of market or an existing business can freely leave the industry in the longer term.
Cheap and efficient transportation:
Another feature of competitive market is low priced and efficient transport. Firms do not incur substantial costs in transporting goods in this type of market. This reduces the cost of the product and lessens the delays in the transportation of goods.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Economics Concept Introduction

Introduction:

A perfect competition market is one where a huge number of sellers compete with each other to fulfill the demands and requirements of a huge number of consumers. The brief idea of perfect competition market is given in the following diagram:

PRIN.OF ECON.ACCESS CODE, Chapter 9, Problem 1QFR

Figure - A

Answer 12

Ch. 9 - Prob. 1QFR Ch. 9 - Prob. 2QFR Ch. 9 - Prob. 3QFR Ch. 9 - Prob. 4QFR Ch. 9 - Prob. 5QFR Ch. 9 - Prob. 6QFR Ch. 9 - Prob. 7QFR

The necessary conditions for perfect completion market to exist

The necessary conditions for perfect completion market to exist

Explanation of Solution

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