Microeconomics
13th Edition
ISBN: 9781337617406
Author: Roger A. Arnold
Publisher: Cengage Learning
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Chapter 9, Problem 3QP
To determine
Explain the given statement.
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A Perfect Competition has [ Select ]
producer(s), products are
[ Select ]
, it is [Select ]
to enter the market,
and producers in a perfect competition have [ Select ]
control over
prices.
Draw a graph of a typical firm and an industry market (with supply and demand). Illustrate and explain what happens in the market if at the initial price, the typical firm is earning an economic profit. Show and explain how the two graphs will adjust toward market equilibrium.
How does a market compete with other firms efficiently to maintain profit in a competitive market over time? Show diagram with shifts in price, cost, quantity, etc.
Chapter 9 Solutions
Microeconomics
Ch. 9.1 - Prob. 1STCh. 9.1 - Prob. 2STCh. 9.1 - Prob. 3STCh. 9.1 - Prob. 4STCh. 9.2 - Prob. 1STCh. 9.2 - Prob. 2STCh. 9.2 - Prob. 3STCh. 9.2 - Prob. 4STCh. 9.3 - Prob. 1STCh. 9.3 - Prob. 2ST
Ch. 9.3 - Prob. 3STCh. 9.3 - Prob. 4STCh. 9.4 - Prob. 1STCh. 9.4 - Prob. 2STCh. 9 - Prob. 1QPCh. 9 - Prob. 2QPCh. 9 - Prob. 3QPCh. 9 - Prob. 4QPCh. 9 - Prob. 5QPCh. 9 - Prob. 6QPCh. 9 - Prob. 7QPCh. 9 - Prob. 8QPCh. 9 - Prob. 9QPCh. 9 - Prob. 10QPCh. 9 - Prob. 11QPCh. 9 - Prob. 12QPCh. 9 - Prob. 13QPCh. 9 - Prob. 14QPCh. 9 - Prob. 15QPCh. 9 - Many plumbers charge the same price for coming to...Ch. 9 - Prob. 17QPCh. 9 - Prob. 18QPCh. 9 - Prob. 1WNGCh. 9 - Prob. 2WNGCh. 9 - According to the accompanying table, what quantity...Ch. 9 - Prob. 4WNGCh. 9 - Prob. 5WNGCh. 9 - Prob. 6WNGCh. 9 - Prob. 7WNGCh. 9 - Prob. 8WNGCh. 9 - Prob. 9WNGCh. 9 - Prob. 10WNG
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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?arrow_forwardHow equilibrium price is determined under perfect competition?arrow_forwardPlease answer all 1. Coldwater Bicycle Company operates its factories at capacity and holds a dominant market position in its home country. When it receives a premium priced order from a new customer in another country, it must decide whether to fill that order or continue to supply the full demand in its home market. When it decided not to completely fill the new order, it incurred Group of answer choices a. Sunk costs b. Average costs c. Opportunity costs d. Marginal costs 2. What might happen if a car dealership is awarded a bonus by the manufacturer for selling a certain number of its cars monthly, but the dealership is just short of that quota near the end of the month? Group of answer choices a. Potential buyers will lose buying power at the dealer b. It may sell the remaining cars at huge discounts to hit the quota c. It creates an incentive to sell cars from different manufacturers d. It would ruin the relationship between dealer and manufacturer…arrow_forward
- Which market offers higher consumer surplus and why? The perfectly competitive firm or the monopoly firm?arrow_forwardWhy are sellers in perfect competition unable to increase prices?arrow_forwardWill a profit-maximizing firm in a competitive market ever produce a positive level of output in the range where the marginal cost is falling? Give an explanation.arrow_forward
- Suppose the shirts industry is perfectly competitive and begins in a long-run equilibrium. (a) Pluto Company invents a new production process that reduces the production cost. What happens to Pluto Company’s profits and the price of shirts in the short run when Pluto Company’s patent prevents other firms from using the new technology? (b) What happens in the long run when the patent expires and other firms are free to use the technology?arrow_forwardIn 2003, a single case in Alberta of bovine spongiform encephalopathy, also known as mad cow disease, temporarily shut down export markets for Canadian beef. a. Using firm and industry diagrams, show the short-run effect of declining demand for Canadian beef due to the shutdown of its export markets. Label the diagram carefully and write out in words all of the changes that you can identify. b. Although export markets eventually began to open up later that same year, the demand for Canadian beef remained low. On a new diagram, show the long-run effect of the declining demand. Explain in words.arrow_forwardb). The Philadelphia water ice industry is a constant cost industry. The demand for water ice shifts outward each year when it gets hot. What are the steps by which the competitive water ice market insures an increased amount of water ice. Explain and graph at the industry and firm levels. What is the long-run price of water ice?arrow_forward
- Sleek Sneakers Co. is one of many firms in the market for shoes. Show the effect that positive profits has on the demand curve faced by Sleek in the long run. Price Quantity Demand 中 Demand ?arrow_forwardThe graph below shows cost curves for a typical firm operating in a perfectly competitive market. Curve 1 represents Marginal Cost (MC), Curve 2 represents Average Variable Costs (AVC) and Curve 3 represents Average Total Costs (ATC). Suppose that the equilibrium price is $12. What will happen in this market in the long run? a. No new entry/no exit. b.Existing firms will exit. c.New firms will enter.arrow_forwardHow can a business compete with other businesses that sell the same products? Lower the price of the competing item. Produce less of the competing item. Raise the price of the competing item. Produce more of the competing item.arrow_forward
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