Reference no: EM133127233
Perfect Competition.
Give an example of each market structure, indicating the characteristics that justify its classification.
What is the meaning of the price being fixed for a company in perfect competition
Why do companies in a market of perfect competition in the long term that operate do not have economic profits?
Assume a perfectly competitive market with 1000 companies that produce face masks. Each of the companies has the same cost structure (see data in Excel).
Considering the demand information in miles of mask boxes on the market in the following data, develop the following items.
Plot the cost curves
What is the minimum price that the company is willing to give in the short term?
What is the market price and equilibrium quantity in the short run?
How much to produce each company?
What are the benefits or economic loss that each company obtains?
Do companies have an incentive to enter or exit the industry in the long term?
What is the number of companies involved in the industry in the long term?
What is the market price in the long run?
What is the equilibrium quantity of production in the long run?
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Production (Daily Boxes)
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Marginal Cost
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Average Variable Cost
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Average Total Cost
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200
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$6.40
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$7.80
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$12.80
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250
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$7.00
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$7.00
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$11.00
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300
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$7.65
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$7.10
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$10.43
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350
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$8.40
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$37.20
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$10.06
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400
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$10.00
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$7.50
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$10.00
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|
450
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$12.40
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$8.00
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$10.22
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500
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$20.70
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$9.00
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$11.00
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Market demand
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|
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Price
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Quantity Demand
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|
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3.65
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500
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|
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5.2
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450
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|
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6.8
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400
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|
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8.4
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350
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10
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300
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|
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11.6
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250
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|
|
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13.2
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200
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