I need a bit of help with this weeks questions!
Q1. TRUE or FALSE: “The output of any one purely competitive firm is so small relative to market output that it has to accept the output desired by customers in that market.” Explain.
Q2. Use marginal and average cost and revenue curves for a perfectly competitive firm to show
(a) a short-term loss situation;
(c) an economic profit situation;
(b) a normal profit situation.
Q3. 15 years ago some analysts argued that Internet retailing would create a new breed of purely competitive firms. Do you agree that this industry as it stands now is perfectly competitive? Why or why not?
Q5. TRUE or FALSE: “In the context of both pure competition and monopoly models, price always equals average revenue. Only when price is given by the market are average and marginal revenue equal, and so price equals marginal revenue.” Explain your answer.
Q6. TRUE or FALSE: “At a level of output where MR exceeds MC, the profit-maximising monopolist could increase profits by lowering its price.” Explain.
Q1. TRUE or FALSE: “The output of any one purely competitive firm is so small relative to market output that it has to accept the output desired by customers in that market.” Explain.
Q2. Use marginal and average cost and revenue curves for a perfectly competitive firm to show
(a) a short-term loss situation;
(c) an economic profit situation;
(b) a normal profit situation.
Q3. 15 years ago some analysts argued that Internet retailing would create a new breed of purely competitive firms. Do you agree that this industry as it stands now is perfectly competitive? Why or why not?
Q5. TRUE or FALSE: “In the context of both pure competition and monopoly models, price always equals average revenue. Only when price is given by the market are average and marginal revenue equal, and so price equals marginal revenue.” Explain your answer.
Q6. TRUE or FALSE: “At a level of output where MR exceeds MC, the profit-maximising monopolist could increase profits by lowering its price.” Explain.