Q: Determine and explain the profit maximization output of a perfectly competitive firm.
A: Perfect competition is a competition where both buyers and sellers have perfect information about a…
Q: How is it possible for perfectly competitive firms to maximize profit in the short run versus in the…
A: Perfect competition: Under the perfect competition market, the price is decided by the demand and…
Q: According to marginal analysis, a perfectly competitive firm will produce an output level where what…
A: According to marginal analysis, a perfectly competitive firm will produce an output level where…
Q: Why is the marginal revenue of a perfectly competitive firm equal to the market price?
A: Perfectly competitive market: - it is a market condition where there are many buyers and many…
Q: How would you describe the demand curve for the purely competitive firm? For the industry?
A: Purely competitive firms are characterised by being price takers where decisions are made…
Q: The profit-maximizing rule states that a perfectly competitive firm:
A: The correct option is B i.e. should produce that level at which MR=MC.
Q: In the short run if a perfectly competitive firm finds itself operating at a loss, it will
A: To find : For a perfect competitive firm in short run if it find itself operating loss what will…
Q: What is the equilibrium or profit-maximizing quantity of production for a perfectly competitive…
A: Prefect competitive market is:- 1) in perfect competitive market, there are many number of sellers…
Q: Would a perfectly competitive firm produce if price were less than the minimum level of average…
A: No, a perfectly competitive firm would not produce if price were less than the minimum level of…
Q: Which of the following conditions describe a perfectly competitive market?
A: Perfectly competitive market is a rare type of market which is difficult to find in the real…
Q: The graph below shows a perfectly competitive firm in short run equilibrium, where the firm has…
A: The profit-maximizing output level is acquired at the intersection of the marginal cost and marginal…
Q: Explain why perfectly competitive firms are classified as a price taker
A: Answer - Price Taker Firm - The price taker firm are those firm who has not the ability to influence…
Q: In a perfectly competitive market, the individual firm's demand curve A) slopes steeply downward to…
A: In a perfectly competitive market, there is a large number of buyers and sellers. Each seller is…
Q: In the long-run, a perfectly competitive firm will earn what kind of economic profit?
A: In the long run, a perfectly competitive firm will earn normal/zero economic profit.
Q: Explain why a perfectly competitive firm earns zero economic profits in the long run.
A: In an economy, different types of markets exist to make an exchange of different types of products.…
Q: If the price of a product produced by a perfectly competitive firm falls below the average total…
A: Perfect competition refers to the situation where there are many buyers and sellers exist in the…
Q: Explain how the perfectly competitive firm decides whether to operate or shut down in the short run.
A: A perfectly competitive firm is a price taker and can sell any quantity of the commodity at the…
Q: Is it true that a firm in a perfectly competitive market will never be able to earn positive…
A: There are different types of market which are broadly grouped as: Perfect competition and Imperfect…
Q: Explain why a competitive firm’s marginal cost curve is the same as its supply curve.
A: In perfectly competitive market there are many sellers as well as buyers. Price is given that means…
Q: The graph shows the cost curves for a perfectly competitive firm. If the market price of the product…
A: A perfectly competitive market is where there are large number of buyers and sellers. The price of…
Q: equilibrium
A: The equilibrium of the perfectly competitive firm from the equilibrium of the industry is different…
Q: What prevents a perfectly competitive firm from seeking higher profits by increasing the price that…
A: In a perfectly-competitive market, there are theoretically infinite number of frim. Each firm here…
Q: Graphically explain the profit maximization condition of a perfect competitive firm.
A: In the perfectly competitive market, a firm experiences a situation that the average revenue will be…
Q: In the long-run, perfectly competitive firms produce at the point where P = ATC MR = MC…
A: in perfect competitive market, there are many number of sellers and buyers which turns the market…
Q: Based on the characteristics of perfectly competitive market explain why firms in this market are…
A: Perfect competition is a type of market structure in which there are large number of buyers and…
Q: Why is a firm in a perfectly competitive market called a price taker? How does a firm in perfect…
A: Price taker: It means a person or company accepting the prevailing prices in the market and unable…
Q: Why is the marginal revenue of a perfectly competitive firm equal the market price?
A: Marginal revenue: it refers to the additional revenue received from the sale of an additional good.…
Q: Explain why a profit-maximizing competitive firm would produce up to the point where price equals…
A: The marginal cost of creation is the adjustment of absolute creation cost that comes from making or…
Q: why does price equal marginal revenue for the perfectly competitive firm? what is the relationship…
A: Perfect competition refers to the type of market organization in which there are many buyers and…
Q: Consider a perfectly competitive market for wheat in San Diego. There are 80 firms in the industry,…
A: No of firms in the industry = 80 Supply curve of each firm starts with minimum AVC and is equal to…
Q: Graphically show the market and firm graphs for the perfectly competitive long run market when firms…
A: Initial long-run equilibrium in the market and firm. It is given that it is a perfectly competitive…
Q: Why a competitive firm is price taker? Explain graphically why perfect competition is preferable to…
A: When the following conditions exist, firms are said to be in perfect competition: (1) many firms…
Q: What is the most important decision a perfectly competitive firm must make to maximize profit? what…
A: In a perfectly competitive market, there are many buyers and sellers. The good produced is…
Q: Meow Chow sells cat food in a perfectly competitive market and has the following cost curves:…
A: The firm produces at MC=P or the nearest lower MC P=0.63 and MC=0.6
Q: Refer to the above graph for a purely competitive firm in the short run. What minimum output level…
A: In order to answer this question, it is imperative to understand the concepts of breakeven and…
Q: Why is the marginal revenue curve for a perfectly competitive firm the same as its demand curve?
A: Perfect or pure competition is a form of market in which a large number of perfectly informed buyers…
Q: Illustrate and fully discuss the derivation of the demand curve for a perfectly competitive firm
A: Perfect Competition Conditions An economic examination of a company's production decisions considers…
Q: Explain how the perfectly competitive firm decides whether to operate or shutdown in the short run.
A: There are mainly two types of costs in the process of production.
Q: Draw the cost curves for a typical firm. Explain how a competitive firm chooses the level of output…
A: A competitive firm faces a parallel price line because in a competitive market, the firm is a price…
Q: What is the shape of the demand curve faced by the perfectly competitive firm? Explain your answer…
A: Perfect competition is the type of market structure in which there are many buyers and sellers of a…
Q: In a perfectly competitive market, firms:
A: When there are large number of buyers and sellers in the market striving for a product then there…
Q: What is the formula for profit maximization by firm ? Why does this result in the marginal cost…
A: The profit for a firm can be calculated by subtracting the total cost (TC) from the total revenue…
Q: Explain the three possible profit maximizing positions of perfectly competitive firms in the…
A: The various forms of market structure include perfect competition, oligopoly, monopoly, and…
Q: At the profit-maximizing output level, what will be the relationship between the perfectly…
A: A profit-maximizing output level is when that gives highest returns to the firm as any change in…
Graphically show how the profit-maximizing level of output is determined for the
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- According to marginal analysis, a perfectly competitive firm will produce an output level where what is true about its Marginal Revenue and its Marginal Cost?In the above figure, if the price is $16 per unit, how many units will a profit maximizing perfectly competitive firm produce?How does a competitive firm determine the quantity that maximizes profit?
- How would you describe the demand curve for the purely competitive firm? For the industry?Draw the cost curves for a typical firm. Explain how a competitive firm chooses the level of output that maximizes profit. At that level of output, show on your graph the firm’s total revenue and total cost.Draw the cost curves for a typical firm. Explain how a competitive firm chooses the level of output that maximizes profit. At that level of output, show on your graph the firm's total revenue and total costs.
- Explain why a competitive firm’s marginal cost curve is the same as its supply curve.How is it possible for perfectly competitive firms to maximize profit in the short run versus in the long run?The following graph shows the demand curve, as well as the AVC, ATC and MC curves of a company selling rolled oats in a perfectly competitive market. Use the graph to answer the questions. The goal of the company is to maximize its profit. How many boxes of rolled oats should it sell to attain this goal? What price will it charge? How much profit does this firm make per month? Will this company produce or shut down in the short run? Why? Will this firm exit the market for rolled oats in the long run or not? Why?
- In the long run, perfectly competitive firms make zero economic profit. If this is the case, why does the firm even bother producing? Why not exit the market completely?Will 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.What is the most important decision a perfectly competitive firm must make in order to maximize profit? what quantity to produce what price to charge what quality to produce what quantity of labor is needed
