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marta [7]
3 years ago
12

Identify whether or not each of the following scenarios describes a competitive market, along with the correct explanation of wh

y or why not.
1. There are hundreds of colleges that serve millions of students each year. The colleges vary by location, size, and educational quality, which enables students with diverse preferences to find schools that match their needs.
2. A few major airlines account for the vast majority of air travel. Consumers view all airlines as providing basically the same service and will shop around for the lowest price.
3. Dozens of companies produce plain white socks. Consumers regard plain white socks as identical and don't care who manufactures their socks.
4. 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.
Business
1 answer:
vodka [1.7K]3 years ago
3 0

Answer:

1. Doesn't describe a competitive market

One of the assumptions of a competitive market is that goods and services are homogenous. This means that goods and services are identical and buyers cannot tell the difference between goods and services. Because colleges vary by location, size, and educational quality,  this seems to violate the assumption of homogenous goods and services.

2. Doesn't describe a competitive market.

In a competitive market, prices are set by the forces of demand and supply. Firms cannot set the market price. Firms and consumers are price takers. If consumers can make choices based on the price, it violates the homogeneity of prices assumption

3. Describes a competitive market.

One of the assumptions of a competitive market is homogeneous goods. Consumers are indifferent about where they buy socks. So this is in line with the homogeneity assumption

4. Doesn't describe a competitive market.

In a perfect competition, there are no barriers to entry or exit of firms. The government giving patents to firms is a form of barrier to firms and this violates the assumption of no barriers to entry or exit of firms

Explanation:

A perfect competition is characterised by many buyers and sellers of homogenous goods and services. Market prices are set by the forces of demand and supply. There are no barriers to entry or exit of firms into the industry.

In the long run, firms earn zero economic profit. If in the short run firms are earning economic profit, in the long run firms would enter into the industry. This would drive economic profit to zero.

Also, if in the short run, firms are earning economic loss, in the long run, firms would exit the industry until economic profit falls to zero.

I hope my answer helps you

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Calculate the GDP using the data below (all figures are shown in millions)
Anit [1.1K]

Answer:

$250 million.

Explanation:

To calculate the GDP using the following data (Personal Consumption = $ 50, Government Consumption = $ 20, Business Consumption = $ 80 and Gross Investments = $ 100) the following calculation must be performed:

50 million + 20 million + 80 million + 100 million = X

250 million = X

Therefore, the GDP is $ 250 million.

3 0
2 years ago
Imagine that the U.S. Congress, recognizing the importance of being well dressed, started giveing preferential tax treatment to
andrezito [222]

Answer:

Part a.

If the Congress of country U to clothing insurance gives a preferential tax treatment, and the insurance company agrees to pay 80% of the clothing expenses and the tax subsidizes the insurance premium, it will result in increase in the consumption of clothes, because people will buy clothes as if they were free.

With this change in behavior there will be decline in economic efficiency because purchasing of formal and expensive clothing is not done on a regular basis, with clothing insurance people will buy less costly daily wear clothes at subsidized rates or for free and the price of clothes will decrease.

Part b.

People who can pay for the 20% remaining cost of clothes will buy insurance clothing and those who can pay the premium. Moreover, the rich will over consume than the poor because they are the ones who will give more importance to good clothing.

Part c.

If a person spends $2000 on clothing the clothing, insurance cost will be more than $2000 because higher the probability of claim higher will be the premium charged by the insurance company.

Part d.  

This is not a good idea by the Congress of country U because good clothing is something every person would like to have. Like in health insurance, people should be insured for big life threatening health issues and for minor health issues people should pay out of their pockets, because people take health insurance benefits for minor health issues since health is more or less free in the COUNTRY U. The high premium costs and high prices are completely ignored.

7 0
2 years ago
At February 1, 2022, the balance in Wildhorse Co. supplies account was $3780. During February Wildhorse purchased supplies of $3
otez555 [7]

Answer: $2,700

Explanation:

The balance in Supplies account at the end of February can be calculated using the formula:

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4 0
2 years ago
When crafting a business message with strong reasoning, it is important to back claims with Multiple choice question. broad gene
Dima020 [189]

Answer:

supporting facts

Explanation:

A business message with strong reasoning has as main objectives to convince a consumer to close a deal or an employee to perform certain tasks for example, the objective is always to support an idea and positively impact and convince the public of something.

Therefore, the most suitable option for a business message with strong reasoning is to use supporting facts, as the recipient of the message will feel much more transparency and security when believing in your message if it is supported by concrete facts that support it, and this can be a strong argument to strengthen and reaffirm your idea so that it is more convincing and supported.

8 0
3 years ago
Select all that apply.
VladimirAG [237]
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medium of exchange- </span>Money serves as a medium of exchange.

3 0
3 years ago
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