A long-run supply curve is flatter than a short-run supply curve because a) competitive firms have more control over demand in the long run. b) long-run supply curves are sometimes downward sloping. c) firms in a competitive market face identical cost structures. d) firms can enter and exit a market more easily in the long run than in the short run.
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- If you were to put the following effects of a decrease in demand into the sequence in which they occur, which would be the last one? Group of answer choices Market output falls. The demand curve facing each individual firm shifts downward. A short-run loss forces some firms out of business in the long run. In the short run, the market price drops. Each firm reduces quantity supplied to the point where marginal cost equals its decreased marginal revenue.In the competitive market for a particular good there are two types of producers: Type A and Type B. Type A producers use a better production technology than Type B producers, so Type A's average cost curve is lower than Type B's for any output level. Both types have upward-sloping marginal cost curves. Assume that the market demand is large enough so that both types of firms produce in the short-run (when the number of firms is fixed) and in the long-run (when the number of firms can change). Which of the following statements is correct regarding the short-run and the long-run equilibria of this competitive market? O a. In the long-run equilibrium, the marginal Type B firm produces where price equals its average cost and makes an economic rent. O b. All firms produce less in the long-run equilibrium than in the short-run equilibrium. O c. In the long-run equilibrium, MC = AC for Type A firms and MC = AC for Type B firms. d. In the short-run equilibrium, Type B firms produce at where…The demand in a market is given by D (p) = 10 - p². There are 6 competitive sellers each with a cost function C(q) = ½ + q². 1 (a) the market. (b) (c) Find the supply curve for an individual seller and the supply curve for Find the short run competitive equilibrium price with the 6 sellers. Find a long run competitive equilibrium price and number of sellers.
- The market for bananas is perfectly competitive. Firms in the arket are producing output and each firm is receiving positive economic profits. Which of the following is true? (i) new firms enter the industry, increasing supply, driving profits down to zero. (ii) firms will exit the industry, increasing supply, driving profits down to zero. (iii) firms will exit the industry, decreasing supply, driving profits down to zero. (iv) new firms enter the industry, decreasing supply, driving profits down to zero.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.= = 41. Suppose that the market for cigarettes is initially in equilibrium and is perfectly competitive. The demand curve can be expressed as P 60Qd; the supply curve can be expressed as P 0.5Qs. Quantity is expressed in millions of boxes per month. What are the amount traded and the price for this market? a) Q = 40; P = 20 b) Q = 20; P = 40 c) Q = 30; P = 30 d) Q = 30; P = 15
- Which of the following is not true for a competitive market? Group of answer choices Firms can earn positive economic profits in the long run Firms sell nearly identical products There are many buyers and sellers Firms expect zero economic long-run profitsDo you agree with the following statement? Give reasons with a complete explanation for your answer. Production possibilities frontiers can shift upwards without an increase in resources. The demand for a commodity increase when the price of its substitute increases. The income elasticity of the demand for luxury goods is always positive. Under perfect competition, a firm fix its price where its AR=MRA perfectly competitive industry is in long-run equilibrium. Each of the identical firms has a long- run cost function C = 100 + q². As a result, a firm's marginal cost function is MC = 2q. In the long-run competitive equilibrium, (a) How much does the firm produce? (b) What is the equilibrium price? (c) If the market quantity demanded at the equilibrium price is Q = 2500, how many firms are in the market?
- The left graph shows the world market for wheat. The right graph shows the cost curves and the marginal revenue curve of an individual wheat farmer at the initial long-run equilibrium. The world population increases. In the left graph, draw the new demand curve. Label it. Draw the market supply curve that returns the wheat market to its long-run equilibrium. Label it. Draw a point to show the new long-run equilibrium price and quantity. In the right graph, draw a point to show the firm's price and quantity in the long run. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.Suppose that the firm operates in a perfectly competitive market. The market price of his product is $4. The firm estimates its cost of production with the following cost function: TC=50+20q-5q2+0.33q3 a. What level of output should the firm produce to maximize its profit? b. Determine the level of profit at equilibrium. c. What minimum price is required by the firm to stay in the market?Marcy owns a photography business in Mobile, Alabama. The market for photography is very competitive. At Marcy's current production level, her marginal cost is $20 and her marginal revenue is $28. In order to maximize profits, Marcy should decrease the price. decrease production. keep production the same. increase the price. increase production.