Appear to be examples of competitive markets

Assignment Help Business Economics

Reference no: EM131098861

Grocery stores and gas stations in a large city would appear to be examples of competitive markets. There are numerous, relatively small sellers, each seller is a price taker and the products are quite similar.

a. Is is possible these markets are perfectly competitive? How could we argue that the firms face a demand curve that is not perfectly elastic? Use the definitions and characteristics of the differenct market structures to justify your reasoning.

b. How profitable do you expect grocery stores and gas stations to be in the long run?

Reference no: EM131098861

Questions Cloud

Assumed to be perfectly competitve for modeling purposes : EverKleen Pool Services provides the weekly swimming pool maintenance in Atlanta. Dozens of firms provide this service and the service is very standardized (so the market can be assumed to be perfectly competitve for modeling purposes). At what outpu..

In terms of maximizing total revenue : In terms of maximizing total revenue, defend or counter the decision of the store, Manor, to lower prices on mobile air-conditioning units from 650 CHF to 300 CHF during the hottest week of 2010 (argument should make use of the concept of elasticity)..

Affect the economy-wide supply of labor : How would each of the following factors likely affect the economy-wide supply of labor? Who gains and who loses?

What is the total unemployment rate : Suppose that a nation has a labor force of 100 people. In January, Amy, Barbara, Carine, and Denise are unemployed; in February, those four find jobs, but Evan, Fancesco, George, and Horatio become unemployed. What is the structural unemployment rate..

Appear to be examples of competitive markets : Grocery stores and gas stations in a large city would appear to be examples of competitive markets. There are numerous, relatively small sellers, each seller is a price taker and the products are quite similar. Is is possible these markets are perfec..

What is the general form of the point elasticity formula : Assume the demand function for beer is defined as: Qb = 10P^-2: From this demand equation is it easy to verify that the slope of this equation,defined as aQ/aP; is equal to -20P^-3. What is the general form of the point elasticity formula for this gi..

Money supply in the entire banking system : The First National Bank has reserves of $150,000 and demand deposits equal to $1,200,000. The reserve ratio is 10 percent. How much in excess reserves does the bank now have? What is the maximum amount the bank could currently lend out? Show all work..

Describe in detail perfectly competitive market structure : Describe in detail a perfectly competitive market structure. Do you think such a market structure exists? Give an example of an actual market structure that resembles a "pure competition" model.

How merger can possibly lead to cost savings-profitabilty : Few years ago, Delta Airlines and Northwest Airlines merged together and created the largest airlines in the world. The logic was to be more efficient and improve profitability. Briefly explain how the merger can possibly lead to cost savings and pro..

User Account

All Pages