Which of these is a valid difference between firms in competitive price-searcher and price-taker markets? Price-taker firms advertise their products, while price-searcher firms do not. Price-searcher firms advertise their products, while price-taker firms do not. Price takers earn economic profit in the short run, while price searchers do not. Price searchers earn economic profit in the long run, while price takers do not.
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- Rebecca owns Louisiana Sugar Company, a manufacturer of sugar. Since there are lots of domestic manufacturers and importers of sugar and it is difficult to practice brand differentiation, the sugar industry is highly competitive. Suppose the demand for sugar increases. (1) What will be the effect on the market price and quantity of sugar in the short run and in the long run? Explain why. (2) What will happen to the economic profits of Louisiana Sugar Company in the short run and in the long run? Explain why.4. Suppose that each firm in a competitive industry has the following costs: Total cost: TC = 50 +÷q? Marginal cost: MC = q; where q is an individual firm's quantity produced. The market demand curve for this product is Demand: Demand: QD = 120 – P , where P is the price and Q is the total quantity of the good in the market. Currently, there are 9 firms in the market. In each following question, please explain how you find the answer! 4.1 What is the equilibrium price and quantity for this market in the short run? 4.2 In this equilibrium, how much does cach firm produce? Calculate cach firm's profit or loss. Is there incentive for firms to enter or exit? 4.3 In the long run with free entry and exit, what is the equilibrium price and quantity in this market? 4.4 In this long-run equilibrium, how much does each firm produce? How many firms are in the market?Please answer only # 3 & 4 Rebecca owns Louisiana Sugar Company, a manufacturer of sugar. Since there are lots of domestic manufacturers and importers of sugar and it is difficult to practice brand differentiation, the sugar industry is highly competitive. Suppose the demand for sugar increases. (1) What will be the effect on the market price and quantity of sugar in the short run and in the long run? Explain why. (2) What will happen to the economic profits of Louisiana Sugar Company in the short run and in the long run? Explain why. Now suppose that the demand for sugar increases again, In order to protect the US sugar industry, the US government forbids the import of sugar into the United States (3) What will be the effect on the market price and quantity of sugar in the short run and in the long run? Explain why (4) What will happen to the economic profits of Louisiana Sugar Company in the short run and in the long run? Explain why.
- Please answer only # 5 & 6. Rebecca owns Louisiana Sugar Company, a manufacturer of sugar. Since there are lots of domestic manufacturers and importers of sugar and it is difficult to practice brand differentiation, the sugar industry is highly competitive. Suppose the demand for sugar increases. (1) What will be the effect on the market price and quantity of sugar in the short run and in the long run? Explain why. (2) What will happen to the economic profits of Louisiana Sugar Company in the short run and in the long run? Explain why. Now suppose that the demand for sugar increases again, In order to protect the US sugar industry, the US government forbids the import of sugar into the United States (3) What will be the effect on the market price and quantity of sugar in the short run and in the long run? Explain why (4) What will happen to the economic profits of Louisiana Sugar Company in the short run and in the long run? Explain why. (5) Are the economic profits of…st.ca/ 2. If you are operating a business in a perfectly competitive market. You can sell as much as at the market price. Why can you not simply increase your profits by selling a highest quantity? Answer: 3. Your company operates in a perfectly competitive market. Your Manager told you that advertising can help you increase your sales in the short run. What kind of advertising campaign you will start for your product and how much gain is expected from an effective advertisement? Answer: 4. Suppose you are running a business and thinking to enter the monopoly market. As per your calculation, you can make a profit by keeping your product price 20% less than the monopolist. Explain, how the monopolist might react to stop you to enter the business? Answer: 5. The real GDP per capita of many countries such as China and Korea are greater than that of the US. Does this indicate that these countries will eventually overtake the US in terms of the growth rate of real GDP per capita? Explain.…4. Suppose that each firm in a competitive industry has the following costs: Total cost: TC = 500 + 0.5q Marginal cost: MC = q Where q is an individual firm's quantity produced. The market demand curve for this product is Demand: Q" = 120 – P Where P is the price and Q is the total quantity of the good. Currently, there are 9 firms in the market (a) What is each firm's fixed cost? What is its variable cost? Give the equation for average total cost. (b) Graph average-total-cost curve and the marginal-cost curve for q from 5 to 15. At what quantity is average-total-cost curve at its minimum? What is marginal cost and average total cost at that quantity? (c) Give the equation for each firm's supply curve. (d) Give the equation for the market supply curve for the short run in which the number of firms is fixed. (e) What is the equilibrium price and quantity for this market in the short run? (f) In this equilibrium, how much does each firm produce? Calculate each firm's profit or loss. Is…
- 9. Which of the following best explains why a price-taker firm faces a horizontal demand curve at the market equilibrium price and a price-searcher firm faces a downward-sloping demand curve? a. A price-taker firm will lose all of its sales if it raises its price above the market equilibrium because it produces products that are identical to its competitors. A price-searcher firm produces a differentiated product and will lose only some sales if it raises its price. b. A price-taker firm will lose all of its sales if it lowers its price below the market equilibrium because it produces products that are identical to its competitors. A price-searcher firm produces a differentiated product and will lose only some sales if it lowers its price. c. A price-taker firm will lose all of its sales if it raises its price above the market equilibrium because it produces products that are differentiated from its competitors. A price-searcher firm produces a product that is identical to its…3. Consider the perfectly competitive markets for bottled water in two cities, A and B. Both have a downward-sloping demand curve and upward-sloping supply curve, and each market is currently in long run equilibrium at the same price. The demand curves are similar, but in city A the supply curve is more price elastic than in city B. a) There's a shock: an accident causes the tap water in the area to become undrinkable. In two diagrams, one for each city, compare the effect on price and quantity traded in the two cities, assuming that a new equilibrium is reached. Explain your diagrams. b) Following on from your answer to a), explain what would happen in the model to the number of suppliers and their profitability, in each of the short run and the long run.Demand Schedule Assume MC = 0 Price Quantity $24 0 $22 1 $20 2 $18 3 $16 4 $14 5 $12 6 $10 7 $8 8 $6 9 $4 10 $2 11 $0 12 1. If the market is perfectly competitive, what will the market equilibrium price and quantity be in the long-term? Explain how you arrived at that answer. 2. If the market is a duopoly and the firms collude to maximize joint profits, what will market price and quantity be? Explain how you arrived at that answer. 3. If the market is a duopoly and the firms collude to maximize joint profits, what is each firm's total revenue if the firm split the market equally? Explain how you calculated that answer.
- 3. Suppose that each firm in a competitive industry has the following costs: Total Cost: TC = 50+ ¹/29² Marginal Cost: MC = q where q is an individual firm's quantity produced. The market demand curve for this product is Demand: QD = 120-P where P is the price and Q is the total quantity of the good. Currently, there are 9 firms in the market. a) What is each firm's fixed cost? What is its variable cost? Give the equation for average total cost. b) At q=10, the average-total-cost curve is at its minimum. What is marginal cost and average total cost at that quantity? c) With free enter and exit, give the equation for each firm's long run supply curve. d) Give the equation for the market supply curve for the short run in which the number of firms is fixed. e) f) What is the equilibrium price and quantity for this market in the short run? In this equilibrium, how much does each firm produce? Calculate each firm's profit or loss. Do firms have an incentive to enter or exit? g) In the long…11. Profit maximization using total cost and total revenue curves Suppose Rian operates a handicraft pop-up retail shop that sells cardigans. Assume a perfectly competitive market structure market price equal to $20 per cardigan. The following graph shows Rian's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for cardigans for seven (including zero and seven) that Rian produces. TOTAL COST AND REVENUE (Dollars) 200 175 150 125 100 75 8 3 0 -25 O 0 U 2 0 □ 0 3 4 QUANTITY (Cardigans) O 6 Total Cost 0 7 8 Total Revenue A Profit ? Calculate Rian's marginal revenue and marginal cost for the first seven cardigans they produce, and plot them on the following gra points (circle symbol) to plot marginal revenue and the orange points (square symbol) to plot marginal cost at each quantity.Question 4: In the market for running shoes, all the firms face a similar demand curve and have similar cost curves to those of Smart in question 3. a.) What happens to the number of firms producing running shoes in the long run?What happens to the price of running shoes in the long run? Answer: b.) What happens to the quantity of running shoes produced by Smart in the long run?What happens to the quantity of running shoes in the entire market in the long run? Answer: c. ) Does Smart shoes have excess capacity in the long run?Why, if Smart firm shoes has excess capacity in the long run, doesn’t the firm decrease its capacity?What is the relationship between Smart Shoes’ price and marginal cost? Answer: Question 3 with awnsers provided below. Question 3: The situation facing by firm “Smart”, a producer of running shoes, is shown in the following figure. What quantity does Smart Shoes produce? Answer: The quantity produced by the firm is at where the MC=MR, where the…