What is the long-run equilibrium for a perfectly competitive market? How do entry and exit affect these? Is this different for increasing and decreasing cost industries than it is for constant cost industries? Be able to graph the market and firm, side-by-side, in the short-run and the long-run
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What is the long-run equilibrium for a
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- Please answer everything in Screenshot, as they all build off one another 3. Below, graph a competitive market and an individual firm in that market when they are all at the initial market equilibrium point. Show the following curves: Marginal Revenue, Market Demand, Average Total Cost, Supply Curve, Average Revenue, and Individual Firm Demand. Did we miss any curves? Draw the last curve we need to show firm production! 4. In the graph below that was used in Question #3, show an event where the product produced in this market has greatly increased in demand. Add curve changes as necessary to both graphs. 5. In #4, is the firm earning an economic profit or an economic loss? 6. Over time, explain what will specifically happen to that market and why? Q3. Market Graph Individual Firm GraphDiscuss the situation facing firms in competitive markets. Why is it said that they are "price takers" and unable to influence the market price? If firms in competitive markets cannot effectively choose the price of their output, what do they decide? What determines the level of output that they produce? Next, think of or research some examples of firms that might decide to shut down in the short run. What do you think would make them choose this course of action? Discuss the industry and firms in it, along with the conditions prompting the potential shutdowns. Could seasonality in demand be a potential factor? Explain. What is the exact price for the product that is referred to as the “shut down” point in the short run? When would a seller possibly decide to exit the industry over the long run? What should product price be compared to when assessing whether there is a profit or loss? Can you think of any examples of declining industries? Explain.PLEASE ANSWER WITH GRAPH: Suppose that an industry is initially at a long-run competitive equilibrium. Originally, firms in the industry had very low fixed costs, but due to a new law, firms' fixed costs increased significantly. Throughout all these changes, the industry remains competitive. Graphically show how this new law changes the industry in both the short run and long run. To receive full credit, you must: Correctly show how the law changed the MC, AVC, ATC, LRS, Demand and Short - Run Supply Curves (if at all). Correctly show profits at the firm level immediately after the new law is put in place and in the long run. Correctly show how the market will adjust to the new long-run competitive equilibrium. Clearly show how the long-run equilibrium market quantity and market price
- Market Structures... Economists try to identify market structures in order to understand how firms and consumers behave. We characterize market structures by the number of buyers or sellers who are present, by the relative ease with which a new seller may enter the market, by the variation in the product from one supplier to the next, and by the amount of competition present. Perfect Competition Perfect competition is the most competitive market structure. A market with perfect competition has a large number of buyers and sellers. In this type of market, there are no barriers to entry or exit, which means a new seller will have a fairly easy time if he wants to start doing business. The product is homogeneous, in the sense that one bushel of wheat isn't really all that different from any other bushel of wheat. A perfectly competitive market is also characterized by the availability of perfect information, or free and equal access for everyone to information about the product, its…The market for fertilizer is perfectly competitive. Firms in the market are producing output but are currently incurring economic losses. How does the price of fertilizer compare to the average total cost, the average variable cost, and the marginal cost of producing fertilizer? Draw two graphs, side by side, illustrating the present situation for the typical firm and for the market. Assuming there is no change in either demand or the firms’ cost curves, explain what will happen in the long run to the price of fertilizer, marginal cost, average total cost, the quantity supplied by each firm, and the total quantity supplied to the market.an inward shift of the demand curve in the competitive market for paper clips. Using fully labeled, side-by-side graphs for the market and the (typical) firm, show what happens (at both the market and firm level) in the short run and long run. In the firm-level graph, be sure to draw a plausible MC and ATC curve for the firm. Show and label any economic profits or losses. You can show both the short run and long run effects on the same pair of graphs.
- In a perfectly competitive market, how do we go from a short run equilibrium to a long run equilibrium?Suppose the market of surgical mask in Country D is competitive. а. Assume the market of surgical mask in Country D operates at her long run equilibrium. Draw side-by-side diagrams to show the long run equilibrium conditions for a typical firm producing surgical masks and the market for surgical masks. Label your diagrams clearly. b. Suppose a trade war happens and many other countries refuse to buy surgical masks from Country D. Making use of your diagram in (a), explain its short run effects on the equilibrium price and quantity in the market of surgical masks in Country D, and the output and the profit/loss of a typical firm producing surgical masks in Country D.Suppose that the perfectly competitive market for wheat spaghetti is in long-run equilibrium. Suppose also that campaigns for fighting obesity make students on lots of college campuses in the US aware of the fact that excessive pasta (including spaghetti) consumption has an adverse effect on body weight, and these campaigns provide an incentive for students to restrict spaghetti consumption. How do the campaigns described above affect the market for wheat spaghetti in the US, that is does the supply or the demand curve for wheat spaghetti shift and in what direction? How are the equilibrium price and quantity of wheat spaghetti affected in the short run? What happens to the short-run profit of the typical producer of wheat spaghetti in the US? What will be the price of wheat spaghetti in the long run? What profit will producers of wheat spaghetti make in the long run? Explain how this outcome is achieved. Use two graphs: one showing the market supply and demand curves for wheat…
- As we begin to study different market structures, consider a market that is fiercely competitive. List the industry. What are the pros and cons of competition? Is competition in this industry a good thing? Why or why not? Would you say this is a purely competitive industry? Explain.The number of firms in an industry is not always a good indicator of the extent to which that industry is competitive.” Do you agree with this statement?Ukraine is one of the biggest exporters of sunflower oil in the world. War between Ukraine and Russia hence significantly impacted the available stock of the sunflower oil in the world’s market. Either sunflower oil or olive oil is an input to manufacture biscuit. Consider that the market for olive oil is in perfect competition and initially at the equilibrium. Explain the impact of the war on the supply, demand, equilibrium on market of olive oil Give a graphical representation