CHAFTER&REVIEW; QUESTIONS a always cay and fast b. the process of competition wh

Question

CHAFTER&REVIEW; QUESTIONS a always cay and fast b. the process of competition where the isefficient peoducers ace driven out of business e. esemplified by fams being seplaced by golfcouns and sesoes d one reason for the decease in consumer buying power when one firm is talon over by another Firm A Ae taker i Fims B 80 Fim Fira B isdividul seller in acoendty market Firrm A Fim B Fim B 6. the electrie company as theirnes ane set by the Publise Uailities Cemiss d a farm that has a brand namo c afrm tha joys positive comenic pros Accerding so the payolfs is Table 1.1 3.The demand curve facing a perfectly competisive firm is market demand Firm A Firs Awil dvertise eely if Firm B adventises Pirm has a dominant strategy but Firm A does not. e both fms have a dominant strategy of not advertising d unit clastic e more inelastie than fot firm in mosopolistie compeitien The most famous cartel i The case of entry and exit The affqulty new frms bave in emering monopolistie compotition as cormpared wih d in monepolstic cempetition ench Em sells a sligly Efferent ee unique product, that is e. b, perfeet competition eachtem se.. ghtydi ment or unique produtthat is no, the . OPEC perfoct coepetition NAFTA production levels alone. shre alone d production levels and or prices 6.Whe, fen, eellade, they usually do so to increase their si b. increase osts and raise bariers to estry Monopoly e All of these can have differentied preducts

Explanation / Answer

1.

At pt. A,

Profit = total revenue – total cost = 12*6 – 12*25

Profit = -$228

2.

The firm should shut down because the AVC is higher than the price. Hence, 0 units should be produced and shutdown should happen.

Answer:

1.

C.

A new services offered by resorts and golf courses are replacing the old fashioned farms. It is the example of creative destruction.

2.

A

It is the individual seller or firm in the perfectly competitive market such as commodity market is called as price taker.

3.

C

It is a horizontal line where MR = AR = Price

4.

B

It is the group of oil producer nations who behave like a cartel in the international market.

5.

D

A cartel not only manipulates the production, but also it manipulates the price.

6.

D

To increase the profits and work together (though with less trust upon each other), cartel is formed and firms collude.

7.

A.

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