Questions tagged [perfect-competition]

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Duopoly Paradox

In these lectures, the professor shows that in a Cournot Duopoly, firms will supply a total market quantity of identical goods between that of a monopoly and that of a perfect competition, while in a ...
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Book reference for graphs explaining ad valorem and specific taxes

Does anyone know any book in which I can read and see graphs about the ad valorem or specific tax in monopolies or perfect competition? I need a graph like this with the explanation but i can't find ...
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Why Marginal Cost (MC) equal Market Price (PC)?

In most models, perfect competition implies that MC = P, shouldn't it be the average cost that is equal to price instead? If the Average Cost is greater than the Marginal Cost, firms are losing money ...
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Supply and Demand Curves under Perfect Competition

I am real learning microeconomics with a bit more math under my belt, but could not understand why the MR=P in competitive markets. This was my attempt at reasoning Given, $R= P*q$ For a linear demand ...
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Why is the number of firms in the short run fixed?

My textbook says that in perfect competition the condition of free entry and exit only applies to the long run equilibrium. Because in the short run no new firms can enter or old ones can leave the ...
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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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2 votes
1 answer
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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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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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2 answers
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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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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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3 votes
2 answers
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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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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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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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2 answers
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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 ...
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