Briefly explain the nature of a perfectly competitive firm. Briefly discuss the effect of new entrants into a perfectly competitive market
A perfectly competitive firm is a price taker, which means that it must accept the prices set in the product market. It should also accept the prices at which it purchases inputs from the input markets. This happens because a perfectly competitive firm is too small to influence the prices in different markets. Products are homogeneous. Firms in a highly competitive market may earn profits in the short run, but the entry of new firms or the expansion of existing firms, which increases industry supply, means that such profits will not persist in the long run.
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Multiple regression analysis typically requires several computers.
A. True B. False C. Uncertain
Transfer payments are payments that are:
A. made in market transactions in order to get the seller to transfer the goods or services to the buyer. B. made in order to obtain public goods or services. C. payments made to households that can then be spent by the households. D. made to firms in order to transfer goods and services to the government.
Which of the following products would be used in calculating GDP?
(A) Plastic manufactured in a factory in Kentucky and sold to toy manufacturers around the world to make plastic toys. (B) Cotton cloth manufactured in India and sold to clothes makers in the United States. (C) Toys manufactured in China at a factory owned by a U.S. company. (D) Cars manufactured in Tennessee at a factory owned by a Japanese automobile company.
Refer to Figure 13-18. Which of the following statements is true?
A) Da represents the long-run demand curve facing a monopolistic competitor in a constant-cost industry while Db depicts the long-run demand curve in an increasing-cost industry.
B) Da represents the long-run supply curve in a perfectly competitive, constant-cost industry while Db depicts the long-run demand curve facing a monopolistic competitor in a decreasing-cost industry.
C) Da represents the long-run demand curve facing a perfect competitor while Db depicts the long-run demand curve facing a monopolistic competitor.
D) Da represents the long-run demand curve facing a monopolistic competitor in a constant-cost industry while Db depicts the demand curve in the short run.