ECON 101 Lecture 9: Economics101-Lecture 9- Caldwell

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puceraccoon173

9 Mar 2017

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Price takers: takes market price has given. Has no individual impact on market price. A price-taking producer is a producer whose actions have no effect on the market price of the good it sells. A price-taking consumer is a consumer whose actions have no effect on the market price of the good he or she buys. A perfectly competitive market is a market in which all market participants are price- takers. A perfectly competitive industry is an industry in which producers are price-takers. There is free entry and exit into and out of an industry when new producers can easily enter into or leave that industry. The marginal revenue curve shows how much marginal revenue varies as output varies. Average revenue = revenue per unit of output. Ar = tr/q = (p x q) / q = p. Under perfect competition: ar = mr = p. Profit maximizing condition for a perfectly competitive firm: p = mc.

Related Questions

1. How is a monopolistically competitive market similar to a perfectly competitive market?

A. There are no restrictions on the entry of new firms.

B. Both have differentiated products with close substitutes.

C. Producers with market power set their own prices.

D. Both have homogeneous products with no close substitutes.

2. Which of the following common features do monopolistically competitive markets, and monopolies share?

A. Barriers restrict new firms from entering.

B. Firms face downward-sloping demand curves.

C. Consumers with market power set prices.

D. Producers with no market power set their own prices.

ceruleancicada74

36.?To stay one step ahead of the forces of competition, a firm can adopt any one of these strategies except

-	?Cost reduction

-	?Product differentiation

-	?Operating where marginal benefits equal marginal costs

?-Develop non-fungible valuable resources

37.Which firm in an industry is likely to have higher profits?

?-Sellers with higher costs than their competitors

?-Sellers with lower costs than their competitors

-	?Sellers with the same costs as their competito

?All of the above

38.?Intense market competition is ________ for producers, since it_______.

-	?Bad; erode consumer surplus

-	?Bad, erode producer profits

-	?Good, increase the price level in the market

?Good; decrease the price level in the market

39.As the number of firms in an oligopoly increases, the magnitude of the

-	output effect increases.

-	output effect decreases.

-	price effect increases.

-	price effect decreases. Thanks!

periwinklehound312

In which of the following ways is a monopoly beneficial to an economy?

A. Monopoly profits give firms more reason to invest in the creation of new products through research and development.

B. Firms that are allowed monopoly profits search out innovative technologies that they can bring to market.

C. With natural monopolies, costs may be lower than those that would exist in competitive markets with many producers.

D. All of the above.

Which of the following is a difference between a perfectly competitive market and a monopoly?

A. The market demand curve faced by a perfectly competitive firm is horizontal, while the market demand curve in a monopoly is downward-sloping.

B. The equilibrium price in a perfectly competitive market exceeds marginal revenue, while the equilibrium price in a monopoly equals marginal revenue.

C. The sellers in a perfectly competitive market are price-makers, while a seller in a monopoly market is a price-taker.

D. There are huge barriers to entry in a perfectly competitive market, while there are no barriers to entry in a monopoly.

In the United States in 2011, there were 104 fatalities per 100,000 workers in the logging industry. This is the second-highest rate after the fisheries industry. Although the fatality rate in this industry is so high, many workers still choose to work as loggers.

What could explain this?

A. Workers choose these high-risk jobs because they are willing to bear an occupational risk to earn a higher wage.

B. Low-risk jobs are already taken, so workers must choose their next-best alternative, which in this case is logging.

C. Workers in these industries lack human capital and must choose to work as loggers.

D. Loggers must be indifferent between low-risk and high-risk jobs.

In the case of a decrease in product prices:

A. the quantity effect always dominates the price effect.

B. the price effect always dominates the quantity effect.

C. when the price effect dominates the quantity effect, total revenue decreases.

D. when the quantity effect dominates the price effect, total revenue decreases

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ECON 101 Lecture 9: Economics101-Lecture 9- Caldwell

ECON 101 Full Course Notes

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