ECON 2001.02 Chapter Notes - Chapter 9: Economic Equilibrium, Perfect Competition, Marginal Revenue

13 views1 pages

harlequinprairie-dog105

5 Oct 2018

School

Ohio State University

Department

Economics

Course

ECON 2001.02

Professor

All

For unlimited access to Textbook Notes, a Class+ subscription is required.

Document Summary

It is impossible for any single buyer or seller to unilaterally change the price of any product. Prices are determined by the overall interaction of supply and demand in a market. A market clearing price is the same as equilibrium price, such that they are both defined as the price where qs = qd. An individual firm"s demand curve is flat at the equilibrium price. Competitive firms must make the following decisions: whether to enter, stay, or leave the industry, whether to produce or temporarily shut down, how much to produce. Total revenue = price quantity ; average revenue = total revenue quantity. Ar = (tr q) = {(p q) q} = p. Marginal revenue = change in total revenue change in quantity. The slope of the total revenue graph is equilibrium price. If a firm"s p > atc, the firm is making + . If a firm"s p = atc, the firm is making 0 .

Related Questions

Step 1: Read the following scenario. Imagine a market where there is perfect competition between two or more companies, such as a fish market where vendors offer the same products 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

Step 2: Use the scenario to answer the following questions. In a one-page (250-word) document, answer the following questions using the information provided in the scenario in Step 1: 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?

mauvepig773

13. One of the limitations of Five Forces is that:

a. These tools reduce producer surplus

b. For one firm to increase profit, it takes it from other participants in the industry

c. Does not provide a firm with sustainable competitve advantage

d. both b & c.

15. All these are characterisctics of a monopoly except,

a. There is one seller of the product

b. Has few substitutes

c. Controls a large share of the market

d. Controls a small share of the market

22. Industries with high barriers to entry

a. Pushes profits to normal returns

b. increases the likelihood of firms entering the industry

c. help firms sustain profits

d. increases the number of competitors

14. How does Ebay differ from an economist's view of a perfect competitve market?

a. Ebay has few buyers whereas perfect competitve industry assumes many buyers

b. Ebay has few sellers whereas perfect competitve industry assumes many sellers

c. There is limited information in ebay whereas perfect competitive industry assumes full information for both buyers and sellers

d. There is no difference between these two markets

26. Low cost strategies are usually found in industries where

a. Products are not particularly differentiated

b. Price competion tends to be fierce

c. Both a and b

d. None of the above

Cigarettes - Price Elasticity of demand = - 0.67

A. Cigarettes

B. Alcohol

C. Sodas

D. None of the above

2. The demand for insulin will be ______________ than the demand for a Caribbean cruise in general

a. More elastic

b. More inelastic

c. Less elastic

d. Less inelastic

Homework help and study guide help, all multiple choice

A monopolist:

A) can sell as much as it wants at the chosen price because it is the only seller.

B) can increase the price only if it is willing to decrease the quantity sold.

C) can increase the price and the quantity sold at the same time.

D) is not restricted by the law of demand.

A monopolistically competitive firm:

A) produces where marginal revenue equals marginal cost and charges the price consumers are willing to pay as given by the demand curve.

B) produces where marginal cost equals average total cost and charges the price consumers are willing to pay as given by the demand curve.

C) chooses price and quantity based on where the marginal cost curve meets the demand curve.

D) chooses price and quantity based on where the average total cost curve meets the demand curve.

21) Oligopoly is A) like a monopoly because there are barriers to entry. B) like perfect competition because oligopoly firms all sell homogeneous goods. C) like monopolistic competition because oligopoly firms all sell differentiated goods D) like perfect competition because there are many firms in the industry
ECON 1102 (Microeconomics) Test 4 (043015)

In ________ market structure, a firm's output depends ________.

A) an oligopoly; only on its own marginal revenue and marginal cost curves

B) a monopolistically competitive; in part on its competitors' price and quantity decisions

C) an oligopoly; in part on its competitors' price and quantity decisions

D) a monopolistically competitive; only on its marginal revenue curve

ECON 2001.02 Chapter Notes - Chapter 9: Economic Equilibrium, Perfect Competition, Marginal Revenue

Document Summary

Get access

Related Documents

ECON 2001.02 Chapter Notes - Chapter 13: Variable Cost, Longrun, Opportunity Cost

ECON 2001.02 Chapter Notes - Chapter 3: Escherichia Coli, Inferior Good, Demand Curve

EC260 Lecture 13: Lecture #13

Related Questions