Which of the following is NOT a condition necessary for perfect competition? There are may buyers and sellers in the market. All firms earn an accounting profit. The products for sale in the market are considered identical. There is free entry and exit into the market.
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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.The market for fertilizer is perfectly competitive. Firms in the market are producing output but are currently making economic losses. Which of the following statements is true about the price of fertilizer? Check all that apply. The price of fertilizer must be less than average total cost. The price of fertilizer must be equal to average variable cost. The price of fertilizer must be less than marginal cost. Assuming there is no change in either demand or the firm's cost curves, which of the following statements is true about what will happen in the long run? Check all that apply. Average total cost will decrease. The quantity supplied by each firm will decrease. The total quantity supplied to the market will decrease. Marginal cost will decrease. The price of fertilizer will increase.In a perfectly competitive market, which of the following characteristics gives rise to the difference between the short-run equilibrium and the long-run equilibrium? There is perfect information regarding prices and quantities. There is a homogenous product. There are many buyers and many firms acting in the market. There is free entry into and out of the industry.
- Which of the following is NOT an assumption of perfect competition? Select one. 1.There are no restrictions on entry into the market 2. There are many buyers 3.There are many firms, each selling an identical product 4. The price each firm sets differs from the prices set by the other firmsWhich one of the following is NOT a requirement for or characteristic of perfect competition? The good must be homogeneous (standardised). All market participants should have perfect knowledge of market conditions. Every firm must have the power to set its own price. There must be a large number of sellers. There should be no government intervention. A small farmer is more likely to operate in a perfectly competitive market than a company like SABMiller because: A small business is more likely to keep close control on costs than a large firm. SABMiller employs many people, whereas perfectly competitive firms are owner managed. The demand for beer is less elastic than the demand for food. A small farmer supplies a small share of market supply. Farming is more risky than beer production.In a market with perfect competition, Prices are set by businesses. businesses confronting an inelastic demand curve. obstacles to admission. Businesses sell the same goods.
- Perfect competition implies that all firms are price takers. All of the choices are correct. all firms are producing the same identical product. there are many firms in the market.In the model of perfect competition, firms maximize profits by producing where: the difference between marginal revenue and marginal cost is maximized. the difference between price and marginal cost is maximized. the difference between price and marginal revenue is maximized. marginal revenue equals price which statement is true? price equals marginal cost.Evaluate the following statements. If a statement is true, explain why. If it is false, identify the mistake and correct the error. Assume the market is perfectly competitive. A profit-maximizing firm should select the output level at which the difference between the market price and marginal cost is greatest. An increase in fixed cost lowers the profit-maximizing quantity of output produced in the short run.
- Perfect Competition in the Long Run and Efficiency Scenario Imagine a market where there is perfect competition between two or more companies, such as a fish market where vendors offer the same product at the same price or online ticket auctions like StubHub. In this market there are four key elements to perfect competition: A large number of buyers and sellers: No barriers to entry or exit: Perfect mobility for customers choosing products: Homogenous products. Explain how output, price, and profit are determined in your perfectly competitive market in the long run. How does that lead to efficiency? How could changes in technology affect the market? How could an increase in demand affect the market?What are the effects of new businesses entering the market?What are the effects of businesses leaving the market?Which of the following are perfectly competitive markets? Market Tomato Growing Coffee vendor Manufacturing computers Constructing new homes Perfectly Competitive? Yes Yes No Yes Number of Firms Few Many Few Many Type of Product Identical or Differentiated Identical Differentiated Identical Ease of Entry High High Low HighJustin’s Jeans sells in a perfectly competitive market with a downward-sloping demand curve and an upward-sloping supply curve. The market price is $33 per unit, and the total fixed cost is $30.(a) Identify the profit-maximizing quantity. Explain using marginal analysis. (b) Calculate the economic profit at the profit-maximizing quantity you identified in part (a). Show your work.(c) Calculate the average fixed cost of producing 6 units. Show your work.(d) Based on your answer to part (b), will the number of firms in the industry increase, decrease, or stay the same in the long run? Explain.(e) Based on your answer to part (b), will the market price increase, decrease, or stay the same in the long run? Explain.(f) The income elasticity of demand for Good M is 1.4, and the cross-price elasticity of demand for jeans with respect to the price of Good M is −0.75. Based on your answer to part (e), what will happen to the demand for jeans? Explain.(g) Now assume that the market in which…