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What is a purely competitive industry?
Firms are price takers, price is equal to marginal costs, demand is perfectly elastic, i.e. constant and horizontal, the firms makes zero economics profits.
What is an example of a purely elastic industry?
What industry is purely elastic
A purely competitive firm's short-run supply curve is?
Because of the price taking nature of the firm in the perfectly competitive market. The supply curve would be the portin of the (Marginal Cost Curve) that disects the (P=Ar=Mr curves). Som from that point up would be the supply curve, to produce below that point would not be beneficial to the establishment. Up sloping and equal to the portion of the marginal cost curve that lies above the average variable cost. The demand curve is also perfectly elastic, this too contributes to the fact.
What is purely competitive seller is?
A purely competitive seller operates in a perfectly competitive market where many sellers offer identical or very similar products. These sellers have no control over the market price and must accept the prevailing price determined by supply and demand. They focus on efficiency and cost management to remain profitable, as any attempt to raise prices would drive customers to competitors. In this environment, the individual seller's actions have no impact on the overall market.
What is an example of a purely elastic market?
currency exchange market
What is a purely competitive industry?
Firms are price takers, price is equal to marginal costs, demand is perfectly elastic, i.e. constant and horizontal, the firms makes zero economics profits.
A firm operating in a purely competitive resource market faces a resource supply curve that is?
B. Perfectly elastic This is because it is operating in a perfect competitive market
What is an example of a purely elastic industry?
What industry is purely elastic
A purely competitive firm's short-run supply curve is?
Because of the price taking nature of the firm in the perfectly competitive market. The supply curve would be the portin of the (Marginal Cost Curve) that disects the (P=Ar=Mr curves). Som from that point up would be the supply curve, to produce below that point would not be beneficial to the establishment. Up sloping and equal to the portion of the marginal cost curve that lies above the average variable cost. The demand curve is also perfectly elastic, this too contributes to the fact.
What is purely competitive seller is?
A purely competitive seller operates in a perfectly competitive market where many sellers offer identical or very similar products. These sellers have no control over the market price and must accept the prevailing price determined by supply and demand. They focus on efficiency and cost management to remain profitable, as any attempt to raise prices would drive customers to competitors. In this environment, the individual seller's actions have no impact on the overall market.
What is an example of a purely elastic market?
currency exchange market
The representative firm in a purely competitive industry?
will
Profits encourage entry into purely competitive industries and losses encourage exit from purely competitive industries because?
When profits are zero, the firm is earning sufficient revenue to cover the opportunity cost.
In long run equilibrium a purely competitive firm will operate where price is?
nn
Explain why perfect competition may result in allocative efficiency?
Because in a perfectly competitive market, resources are used perfectly efficiently (excuse the grammar). A purely competitive market has very many peculiar features. One of them is that every firm is a price taker. This means they cannot set the price, so they must be as efficient as the most efficient competitor or they will be out-priced. This results in inefficient firms going out of business and only the most efficient staying alive.
A purely competitive firm is precluded from making economic profit in the long run because?
it is a price taker
What market characteristics suggests that purely competitive firms have only weak incentives to innovate?
Economies of scale
