Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
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Textbook Question
Chapter 8, Problem 26RQ
Do entry and exit occur in the short run, the long run, both, or neither?
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a donut shop charges customers the same price. the profit maximising output is 100 at a price of 5$ per donut. marginal cost is 2$.
The donut shop owner now discovers that it has two very different types of customer children and adults . It can maximise its profits by selling 30 donuts to children for a price of 4$ per donut and 70 donuts per evening to everyone else for a price of 6$ per donut. Draw a diagram showing the profit-maximising price and output a) when all customers are charged the same price and b) when children are charged a different price c)How much profit does the donut shop owner make when children are charged a different price?
explain how to draw the diagrams also in detail please!
What are the advantages of pure competition?
What is an example of another business that stays open even when it's slow, and its revenue does not seem like it could cover its costs? Use microeconomics terms to explain
Chapter 8 Solutions
Principles of Economics 2e
Ch. 8 - Firms ill a perfectly competitive market are said...Ch. 8 - Would independent trucking fit the characteristics...Ch. 8 - Look at Table 8.13. What would happen to the films...Ch. 8 - Suppose that the market price increases to 6, as...Ch. 8 - Explain in words why a profit-maximizing film will...Ch. 8 - A firms marginal cost curve above the average...Ch. 8 - If new technology in a perfectly competitive...Ch. 8 - A market in perfect competition is in long-run...Ch. 8 - Productive efficiency and allocative efficiency...Ch. 8 - Explain how the profit-maximizing rule of setting...
Ch. 8 - A single firm in a perfectly competitive market is...Ch. 8 - What are the four basic assumptions of perfect...Ch. 8 - What is a price taker firm?Ch. 8 - How does a perfectly competitive firm decide what...Ch. 8 - What prevents a perfectly competitive firm from...Ch. 8 - How does a perfectly competitive film calculate...Ch. 8 - Briefly explain the reason for the shape of a...Ch. 8 - What two rules does a perfectly competitive firm...Ch. 8 - How does the average cost curve help to show...Ch. 8 - What two lines on a cost curve diagram intersect...Ch. 8 - Should a firm shut down immediately if it is...Ch. 8 - How does the average variable cost curve help a...Ch. 8 - What two lines on a cost curve diagram intersect...Ch. 8 - Why does entry occur?Ch. 8 - Why does exit occur?Ch. 8 - Do entry and exit occur in the short run, the long...Ch. 8 - What price will a perfectly competitive firm end...Ch. 8 - Will a perfectly competitive market display...Ch. 8 - Will a perfectly competitive market display...Ch. 8 - Finding a life partner is a complicated process...Ch. 8 - Can you name five examples of perfectly...Ch. 8 - Your company operates in a perfectly competitive...Ch. 8 - Since a perfectly competitive firm can sell as...Ch. 8 - Many films in the United States file for...Ch. 8 - Why will profits for films in a perfectly...Ch. 8 - Why will losses for firms in a perfectly...Ch. 8 - Assuming that the market for cigarettes is in...Ch. 8 - In the argument for why perfect competition is...Ch. 8 - The AAA Aquarium Co. sells aquariums for 20 each....Ch. 8 - Perfectly competitive firm Doggies Paradise Inc....Ch. 8 - A computer company produces affordable,...
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Similar questions
- Why don't firms in a competitive market have excess capacity in the long run?arrow_forwardWhat is the relationship between economies of scale and the level of market competition?arrow_forwardConsider the following market for Tim's Terrible T-shirts a firm company producing in the monopolistically competitive t-shirt market. MC $14 $12 ATC $10 $8 $6 $4 $2 MR 0. 10 30 40 50 60 70 80 Quantity Price 20arrow_forward
- Soft drink industry has been historically profitable why? compare the economies of the concentrate business to the economics of the bottling business. Why do you think the profitability is so different between these businesses?arrow_forwardAre the products different?-perfect/pure competitionarrow_forwardAssuming that the market for cigarettes is in perfect competition, what does allocative and productive efficiency imply in this case? What does it not imply?arrow_forward
- George Stigler, "Perfect Competition, Historically Contemplated," Journal of Political Economy,Vol. 55, No. 1, (February 1957), pp. 1-17. Despite the fact that few firms sell identical products in markets where there are no barriers to entry, economists believe that the model of perfect competition is important because A. economists prefer studying theoretical markets instead of actual markets. B. all markets eventually become perfectly competitive. C. it is a benchmark—a market with the maximum possible competition—that economists use to evaluate actual markets that are not perfectly competitive. D. this is the type of market that our business laws protect and promote.arrow_forwardwhy competitive firms stay in business if they make zero profit?arrow_forward3. Two poultry farms supply companies with chicken feeds. The unit costs of shipping from the farms to the companies are given on the table below. The farm's goal is to minimize the cost of meeting customer's demands. (a) Generate a mathematical model for finding the least cost way of shipping chicken feeds from the farms to the companies. (b) if the demand of company number 2 increased by 3 units. By how much would the costs increase? Show your solution. Ic). Solve the total cost using the solver add-in in excel From Company 1 Company 2 Company 3 Supply Farm A 55 65 80 35 Farm B 10 15 25 50 Demand 10 10 10arrow_forward
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