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What is a perfectly competitive market

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Reference no: EM13870307

1. What is a perfectly competitive market?

2. What are the assumptions of a perfectly competitive market?

3. Who does determine the price of a product in a perfectly competitive market?

4. Where is the price of a product in a perfectly competitive market determined?

5. How is the price of a product in a perfectly competitive market determined?

6. Can a firm in a perfectly competitive market sell it's good below the market price to maximize it's profit?

7. A perfectly competitive firm should sell it's product at .......price.

8. In perfect competition the marginal revenue of an individual firm equals the .........of the product.

9. In the case of a perfectly competitive firm, the firm's marginal revenue ....... the average revenue.

10. Sidney's Sweaters, Inc. makes exactly zero economic profit, then why does Sidney, the owner stay in the business?

666_What is a perfectly competitive market.png

11. What is the profit maximizing level of output in the above figure?

12. A perfectly competitive firm maximizes its profit by producing the output at which its marginal cost equals its.............

13. A firm will expand the amount of output it produces as long as its marginal revenue exceeds its ........

14. A competitive firm should shut down if the price of its product is below its ............ cost.

1850_What is a perfectly competitive market1.png

Use the above figure to answer questions 15 and 16:

15. What level of output will the firm produce if price is P1.

16. Show the profit.

17. What is a monopoly market?

18. Is a firm price maker in a monopoly market?

19. What are the differences between market demand and firm demand in a monopoly market?

20. What is natural monopoly? What are the reasons for natural monopoly?

21. What is the relationship between price and marginal revenue curves of a monopoly firm.

69_What is a perfectly competitive market2.png

Use the figure below to answer questions 22 and 23:

22. Find profit maximizing level of output.

23. Find and show profit.

24. Can a monopolist earn economic profit in the long run? Why? Explain?

25. Can a firm in a perfectly competitive industry earn economic profit in the long run? Why? Explain?

26. Compare production and price in a perfectly competitive market and a monopoly market. Explain which market produces more with a lower price.

27. What are characteristics of a Monopolistic Competitive market?

28. Give 3 examples of monopolistically competitive industries.

29. Is a firm in a monopolistic competitive market a price taker or a price setter?

30. Can a firm in a monopolistically competitive market make profit in short run? In long run? Why? Explain.

31. What are characteristics of an Oligopoly market?

32. What is a market with a four-firm concentration ratio of 75%?

33. What is price clouding?

Reference no: EM13870307

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