why does a purely competitive firm not charge a price below the market price?

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: Perfectly competitive firm that makes economic loses in the short run must cease its operations. do…

A: Perfectly competitive firm is a price taker because there are many sellers in the market selling…

Q: In the long-run, any perfectly competitive firm that produces will choose a quantity such that

A: The market is a location where the transaction of services and commodities takes place. It is…

Q: Explain briefly why a firm under perfect competition is a price taker not a price maker?

A: A market is the collection of buyers and sellers. There are different forms of markets based on…

Q: Can a perfectly competitive firm set its own market price?

A: Perfect or pure competition is a form of market in which a large number of perfectly informed buyers…

Q: Consider a perfectly competitive market for wheat in Denver. There are 80 firms in the industry,…

A: Answer; Note: Short‐run supply curve of a firm is the portion of the marginal cost curve that lies…

Q: At what point does a firm in a perfectly competitive industry shut down? Explain with graph.

A: In a perfectly competitive industry, at the profit maximizing level of output, when the market price…

Q: What is the meaning of ‘acceptable loss’ for a perfectly competitive firm ? Draw a graph and…

A:

Q: If Fatimah's Bee Farm is a perfectly competitive firm, the demand for Fatimah's honey has? 1. Zero…

A: Perfect competition refers to the market structure in which there are many buyers and sellers of a…

Q: Why does a purely competitive firm not charge price above the market price?  Why does it not charge…

A: In a perfect competition market structure, there exist a large number of buyers and a large number…

Q: Refer to the graphs above of perfectly competitive firms. Which of the following statements is…

A: In graph 1, the firm is earning economic profit as price is above the ATC. The profit maximizing…

Q: What is the shape of the demand curve of a firm under perfect competition

A: # A firm under perfect Competition is a price taker. This is because due to large number of firm's…

Q: Distinguish the difference between the market demand curve and the demand curve that a particular…

A: Market demand curve: The market demand curve shows the total quantity demanded at a given price by…

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: A perfectly competitive firm showing a profit

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

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: Why would a profit-maximizing, perfectly competitive form continues to operate for a period of time…

A: A perfect competitive firm who is facing losses in the market will decide to shut down if the price…

Q: Perfect Competition; How can the demand curve facing the firm be horizontal if the markket demand…

A: Perfectly competition is characterized by the presence of large number of buyers and sellers. the…

Q: How does a perfectly competitive firm decide what price to charge?

A: Firms in a perfectly competitive market cannot influence the price as there are large numbers of…

Q: Define perfect competition. Does a firm under perfect competition always make supernormal profit?…

A: The Perfect Competition market is that type of market in which the number of buyers and sellers is…

Q: Derive the economic profit and loss of a firm in a perfectly competitive market from the…

A: Perfect competition is the market structure where large numbers of firms and buyers are exchanging…

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: Explain why a perfectly competitive firm won’t advertise.

A: In perfect competition, there are a large number of buyers and sellers where the latter do not have…

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: 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: Explain why a perfectly competitive firm would or would not advertise.

A: Perfect competition refers to the type of market organization in which there are many buyers and…

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: At the profit-maximizing output level, what will be the relationship between the perfectly…

A: Perfect competition: Perfect competition is a market structure where exists a large number of…

Q: Why does a purely competitive firm not charge price above the market price?

A: In a perfectly competitive market there are large number of numbers of sellers selling homogeneous…

Q: For a perfectly competitive firm, what is the relationship between Price and Marginal Revenue?

A: For a perfectly competitive firm price is equal to marginal revenue

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: Identify a perfectly competitive firm

A: A perfectly Competetive firm is a price taker it means it has to accept the market prevailing price.…

Q: The firm in pure competitive

A: A theoretical market structure that meets the following requirements is known as pure or perfect…

Q: TRUE OR FALSE If a perfectly competitive firm shuts down in the short run, its total cost equals…

A: Perfectly competitive firm are those whose are price taker . They take the price which is formed by…

Q: the profit maximization condition for a perfectly competitive firm in the short-run- is

A: Perfect competition is the market form that involves a large number of buyers and sellers in the…

Q: condition for profit maximization for a pure

A:

Q: Explain what the long run profit conditions are for a perfectly competitive market

A: Perfectly Competitive Market is the one where there are large number of buyers and sellers, selling…

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: Classify the statements based on whether each describes a perfectly (purely) competitive firm…

A: A perfectly competitive firm is a price taker, which means it takes the price set by the market…

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: Refer to the above diagram for a purely competitive producer. The lowest price at which the firm…

A: Pure competition is a market structure with a broad range of buyers and sellers which is really…

Q: How does a competitive firm determine its profit-maximizing level of out put? Explain. . When does a…

A: A competitive firm determines its profit maximizing level of output when P= MR= MC  When the…

Q: The marginal revenue curve for a perfectly competitive firm is

A: Marginal revenue is the additional revenue earned through the sale of additional output. A graphical…

Q: What is the meaning of ‘acceptable loss’ for a perfectly competitive firm ?

A: