Questions tagged [perfect-competition]

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Long run equilibrium price under perfect competition

I have a problem related to Ricardian rent. I have one firm, let's call it X firm, and all of the other firms in the market. All firms have to pay some transportation costs due to their land except ...
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What theoretical effects does the minimum wage have on a perfectly competitive market's CPI? [closed]

I don't need statistics, I already have some that lean positively towards the minimum wage. However, I'm trying to find the negative theoretical effects on the CPI through unemployment and a price ...
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1answer
28 views

Uniform price vs. pay-as-bid auctions in energy markets

These two types of auctions are most commonly used in the energy trading markets. What would be advantages and disadvantages of each? And in the end, can we expect them to deliver similar outcome? One,...
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26 views

Competitive markets, taxation and international trade

Suppose that in a competitive market, the supply function is given by $S(p) = 5000(p-2)$ and the demand function is given by $D(p) = 2000(16-p)$. Suppose still, that in order to recompose its' budget ...
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1answer
39 views

Why wouldn't other firms follow suit if an individual firm decides to cut its price?

Why doesn't the demand curve an individual firm faces in a perfectly competitive market have the same elasticity as it does in a oligopolistic market? Under perfect competition, if a firm increases ...
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1answer
61 views

Microeconomics question

I'm given this question. I'm not sure if I'm doing it right. Can any one help? ...
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2answers
1k views

Why does a firm make profit in a perfect competition market

I'm solving a problem about $n=180$ firms in a perfect competition market, where demand is given by $D(p)=100-5p$. A firm's cost function is $c(q_i) = 2 \cdot (q_i)^2$. Using $p = c'(q_i)$ and the ...
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3answers
711 views

Long Term Economic Profit for Perfectly Competitive market

When we consider a perfectly competitive market, in the short run we will run a firm if the total economic profit though negative till price is above shutdown point.In long run we will run at an ...
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19 views

Demand and marginal revenue evolution from Monopoly to Perfect Competition as new competitors enter the market (Graphs)

I want to ask if anyone know how the curves of Marginal Revenue and Demand "evolve" from Monopoly to Perfect competition on a graph of a firm as new competitors enter the market. I would ...
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1answer
43 views

Is the minimum of short run average cost equal to the minimum of long run average cost? [duplicate]

I understand that for perfect competition, the price is equal to minimum short and long run average cost in the long run as there cannot be any supernormal profits. Does this mean that the short run ...
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191 views

Does the minimum of short-run average cost equal the minimum of long-run average cost in the long run for perfect competition?

I was recently reading this resource (http://www2.econ.iastate.edu/classes/econ101/hallam/Comp_LongRun_HND.pdf) which states that in the long run for perfect competition, price is equal to both the ...