Characteristics of competitive markets
The model of competitive markets relies on these...
Characteristics of competitive markets
The model of competitive markets relies on these three core assumptions:
1. There must be many buyers and sellers a few players can't dominate the market.
2. Firms must produce an identical product buyers must regard all sellers' products as equivalent.
3. Firms and resources must be fully mobile, allowing for free entry into and exit from the industry.
The first two conditions imply that all consumers and firms are price takers. While the third is not necessary for price-taking behavior, assume for this problem that a market cannot maintain competition in the long run without free entry.
Identify whether or not each of the following scenarios describes a competitive market, along with the correct explanation of why or why not.
The government has granted a patent to a pharmaceutical company for an experimental AIDS drug. That company is the only firm permitted to sell the drug.
A. yes, meets all assumptions
B. no, no free entry
C. no, not many sellers
D. No, not an identical product
In a small town, there are two providers of broadband Internet access: a cable company and the phone company. The Internet access offered by both providers is of the same speed.
A. yes, meets all assumptions
B. no, no free entry
C. no, not many sellers
D. No, not an identical product
In a major metropolitan area, one chain of coffee shops has gained a large market share because customers feel its coffee tastes better than that of its competitors.
A. yes, meets all assumptions
B. no, no free entry
C. no, not many sellers
D. No, not an identical product
Dozens of companies produce plain white socks. Consumers regard plain white socks as identical and don't care who manufactures their socks.
A. yes, meets all assumptions
B. no, no free entry
C. no, not many sellers
D. No, not an identical product
Answers: 1
Business, 22.06.2019 11:00
Which statement best describes the variety of workplaces commonly found in the health science career cluster? a. workplaces in this cluster include healthcare facilities such as hospitals, physician offices, and clinics. b. workplaces in this cluster include healthcare facilities, laboratories, and other environments such as offices or homes. c . workplaces in this cluster include nonprofit hospitals, government-run clinics, and private physicians' offices. d. workplaces in this cluster include private and nonprofit hospitals and clinics, and dentists' offices.
Answers: 1
Business, 22.06.2019 11:40
Jamie is saving for a trip to europe. she has an existing savings account that earns 3 percent annual interest and has a current balance of $4,200. jamie doesn’t want to use her current savings for vacation, so she decides to borrow the $1,600 she needs for travel expenses. she will repay the loan in exactly one year. the annual interest rate is 6 percent. a. if jamie were to withdraw the $1,600 from her savings account to finance the trip, how much interest would she forgo? .b. if jamie borrows the $1,600 how much will she pay in interest? c. how much does the trip cost her if she borrows rather than dip into her savings?
Answers: 1
Business, 22.06.2019 17:30
Which curve shows increasing opportunity cost as you give up more of one option? demand curve bow-shaped curve yield curve indifference curve
Answers: 3
Mathematics, 06.05.2020 01:33
Mathematics, 06.05.2020 01:33
Mathematics, 06.05.2020 01:33
Mathematics, 06.05.2020 01:33
Mathematics, 06.05.2020 01:33
Health, 06.05.2020 01:33
Computers and Technology, 06.05.2020 01:33
Geography, 06.05.2020 01:33
Arts, 06.05.2020 01:33
Mathematics, 06.05.2020 01:33
Mathematics, 06.05.2020 01:33