How is "efficiency" in economics measured? Evaluate the efficiency of purely competitive firms.

Expert Solution

Rahul Sunny answered 1 year ago

Firms in the market for soccer balls are selling in a purely competitive market. A firm...

Firms in the market for soccer balls are selling in a purely competitive market. A firm in the soccer ball market has an output of 1,000 balls, which it sells for $9 each. At the output level of 1,000, the average variable cost is $8, the average total cost is $11.00, and the marginal cost is $9. 1. What would you expect the firm to do in the short run? in the long run?

What is economic efficiency? Why are purely competitive industries economically efficient and monopoly industries are not...

What is economic efficiency? Why are purely competitive industries economically efficient and monopoly industries are not efficient?

Suppose the cell phone industry is purely competitive and consists of 1,000 identical firms. Each firm...

Suppose the cell phone industry is purely competitive and consists of 1,000 identical firms. Each firm is maximizing total profit by producing 100 phones and selling them at a price of $50 each. The per unit profit is $8 per phone. Assume the firms have normal-shaped curves and minimum ATC is 40 at 75 units. The minimum AVC is 30 at 50 units. a. Draw graphs representing the industry (market) and representative firm. Show on the industry graph market supply...

When many people think of “economics”, they think of money. However, economics is not purely about...

When many people think of “economics”, they think of money. However, economics is not purely about money but how individuals and societies make difficult choices regarding all kinds of scarce resources. Do you believe that people typically make “rational” choices in their decision-making? In other words, do people typically make choices in their best interest? Why or why not? How do you define “best interest”? Is this different from societal interest? How?

Compare  the short run and long run for perfectly competitive firms. How do perfectly competitive firms...

Compare  the short run and long run for perfectly competitive firms. How do perfectly competitive firms adapt to market changes in the short run? What can perfectly competitive firms expect in the long run in terms of profits?

What makes a monopolistically competitive market different from a purely competitive market or a monopolist?

1.Perfectly competitive firms achieve allocative efficiency when they produce such that: Multiple Choice a.P = MC....

1.Perfectly competitive firms achieve allocative efficiency when they produce such that: Multiple Choice a.P = MC. b.P = AC. c.MR = P. d.TR = TC. 2. In Sam's greenhouse operation, labor is the only short term variable input. After completing a cost analysis, if the marginal product of labor is the same for each unit of labor, this will imply that: Multiple Choice a.the average product of labor is always equal to the marginal product of labor. b.the average product...

1. What happens to efficiency and capacity when monopolistically competitive firms produce where their ATC meets...

1. What happens to efficiency and capacity when monopolistically competitive firms produce where their ATC meets the demand curve? (Name and explain the specific concepts.) IN YOUR OWN WORDS PLEASE.

Assume the following unit‑cost dataare for a purely competitive producer:TotalProductAveragefixedcost...

Assume the following unit‑cost data are for a purely competitive producer:TotalProductAveragefixedcostAveragevariablecostAveragetotalcostMarginalcost012345678910$60.0030.0020.0015.0012.0010.008.577.506.676.00$45.0042.5040.0037.5037.0037.5038.5740.6343.3346.50$105.0072.5060.0052.5049.0047.5047.1448.1350.0052.50$45403530354045556575At a product price of $41, will this firm produce in the short run? Why, or why not? If it does produce, what will be the profit‑maximizing or loss‑minimizing output? Explain. What economic profit or loss will the firm realize per unit of output.

1. Monopolistic competitive firms and perfectly competitive firms are similar in that both

1. Monopolistic competitive firms and perfectly competitive firms are similar in that bothGroup of answer choicesset price equal to marginal cost.face a horizontal demand curve.face no barriers to entry or exit.produce a homogeneous product.all of the above2. Does the monopolistic competitive firm exhibit resource-allocative efficiency?Group of answer choicesNo, because at its chosen quantity of output, price does not equal the lowest possible average total cost.Yes, because at its chosen quantity of output, price equals marginal cost.No, because at its chosen...

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