When the level of output, marginal cost is $1 and average variable cost is $1.50. The firm should "produce no output units".
<h3>What is purely competitive market?</h3>
Perfect competition refers to a fictitious market structure. If there is perfect competition, there are no monopolies.
The following characteristics of this kind of structure are crucial:
- All enterprises sell the same product, which is a homogeneous or commodity good.
- Every business is a price taker, meaning that they have no control over the market price for their goods.
- Market share has no bearing on price adjustments.
- The product being supplied and the pricing each business is seeking with in past, present, or future are all completely or perfectly known to buyers.
- Resources such as labor and capital are totally movable.
- There are no fees for businesses to enter or exit the market.
Each genuine market can be categorized as imperfect since they all occur beyond the level of the ideal competition model.
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For the answer to the question above, my answer would be comparison and contrast, as it is explaining the similarities between coal and petroleum.
I hope my answer helped you. Feel free to ask more questions. Have a nice day!
Answer:
a. $39,400
b. $157,600
c. $6,304
Explanation:
a. Down payment
Bank requires 20% down payment
= 20% * 197,000
= $39,400
b. Mortgage amount
= Price of house - down payment
= 197,000 - 39,400
= $157,600
c. Amount at 4 points:
= Mortgage * 4%
= 157,600 * 4%
= $6,304
Question:
If an utility company were considering an increase in electricity or gas prices in order to cover the costs of a capital investment, this sector would result in the smallest change in quantity demanded in the long run and thus higher profits. True or false?
Answer:
The answer is True.
Explanation:
Change in the demand for gasoline and or electricity is primarily set by the number of industrial or bulk users.
Scarce goods are allocated though the help of prices. It is important to note that demand for gasoline or electricity is <u>more elastic in the long term</u>, so small changes in price will alter supply and demand in either direction in the shortrun.
The demand for gas or electricity are by nature <em><u>inelastic.</u></em> This means that when prices go up, demand goes down <em><u>but not by much.</u></em>
It means that in the short term, the individuals cannot alter their lifestyle immediately to adjust for the hike in prices.
To adjust they would have to probably purchase new devices which or cars which consume less gas or electricity.
The effect this has for the company on the overall is that they are able to achieve their aim of recouping their capital investments from the planned increase in price.
Cheers!