Microeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506893
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Chapter 9, Problem 2CQ
To determine
The changes of market
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Give an example of a price at which this firm would want to produce and sell output in the short run, but not in the long run.
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Microeconomics: Private and Public Choice (MindTap Course List)
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- Why don't firms in a competitive market have excess capacity in the long run?arrow_forwardCan excess profit be earned in perfectly competitive markets in the long run. Explain.arrow_forwardExplain why economic profits in all perfectly competitive markets will tend toward zero in the long run. Is this a good thing or a bad thing for producers and consumers? Explain.arrow_forward
- A single firm in a perfectly competitive market is relatively small compared to the rest of the market. What does this mean? How “small” is “small”?arrow_forwardExplain in detail how purely competitive markets, in the long-run, know how to adjust to and provide the correct output, at the correct price. Give an example of a good or service you might buy that is closest to being in a purely competitive market. Explain your logic.arrow_forwardIn a perfectly competitive market, how do we go from a short run equilibrium to a long run equilibrium?arrow_forward
- In the long-run, a perfectly competitive firm will earn what kind of economic profit?arrow_forwardSuppose a corn dog stand market is perfectly competitive and in long-run equilibrium. One day, the city starts imposing a $300 per year tax on each stand. How does this policy impact the number of corn dogs produced and sold in the market in the short run and long run? Down in the short run and no change in the long run No change in the short run and down in the long run Up in the short run and no change in the long run No change in the short run and up in the long runarrow_forwardWhat determines the slope of the Market Supply Curve over the long run? Discuss some reasons why it might have an upward slope, and how these reasons differ from those that cause an upward sloping supply curve in the short run.arrow_forward
- If economic profits are being made in a perfectly competitive market, then firms will ________the market. This will ________ the extra revenue firms earn for each unit of output sold. What is the misisng words?arrow_forwardDescribe how we can identify a competitive firm’s short-run supply curve.arrow_forwardAssume that a firm in a competitive market faces the following cost information. If the market price for this firm's product is $40, calculate the profit maximizing level of output for this firm using marginal analysis. a.Approximately where do you think the price will end up in this market over the long run? b.Last, instead of assuming a given price, how would you go about finding the equilibrium price if you were given information on market demand?arrow_forward
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