1. Explain the importance of free-entry and free-exit market conditions, and perfect access to market relevant information, when determining the long-run level of a firm’s total profit (above-normal,...

1 answer below »

1. Explain the importance of free-entry and free-exit market conditions, and perfect access to market relevant information, when determining the long-run level of a firm’s total profit (above-normal, normal or below-normal) in pure competition. Finally, what does the McGuigan textbook (Chapter 10) say happens to the efficiency of perfectly competitive markets when there is asymmetric information among market participants?
2. Economists consider the end-results of allocative efficiency and productive efficiency in pure competition to be beneficial outcomes for the entire economy. To answer this question, discuss how allocative efficiency differs from productive efficiency, and why each of these outcomes is desirable from an economy-wide perspective.
3. Compare and contrast the market conditions, market power and market outcomes that distinguish monopolistic competition from pure competition. How are the efficiency end-results of monopolistic competition different from those of pure competition? In your answer, discuss how economists view the desirability of the economic efficiency end-results in monopolistic competition.
4. In Chapter 10, the McGuigan textbook examines the concepts of competitive strategy, sustainable competitive advantage, core competencies and industry analysis. Explain the meaning of each of these concepts. How are these concepts all logically-connected to each other?
5. When analyzing the short-run decision-making of firms, economists argue that it is not always rational to temporarily shut-down a production plant when the industry’s product price falls below the average total cost of production. Instead, economists recommend that managers perform “shutdown point analysis” before making any decisions to continue production or shut down operations. Completely explain the economic rationale behind shutdown point analysis.
Answered 5 days AfterApr 05, 2022

Solution

Insha answered on Apr 11 2022
11 Votes
Last Name 3
Name:
Professor:
Course:
Date:
Title: Economics
Contents
Question 1    3
Question 2    3
Question 3    3
Question 4    4
Competitive Strategy    4
Sustainable Competitive Advantage    4
Core Competencies    4
Industry Analysis    4
Question 5    5
Works Cited    6
Question 1
The market might fully evaporate if the knowledge is sufficiently asymmetrical (Chapter 10). The diverse information created by market liquidity levels has a significant impact on predicted returns. Liquidity is inextricably linked to information. Liquidity is a difficulty in "perfect" and full markets, with vast and readily available information from all market players.
Question 2
In actuality, there is a clear distinction between the two: productivity is concerned with overall production over time, whereas efficiency is concerned with input vs. output. The latter is concerned with making specific production compromises in order to
ing things back into balance and restore order in chaotic situations. Total, efficiency is linked to effectiveness, which is a measure of a resource's overall performance (Chapter 8).
Question 3
In a completely competitive market, each business conducts a production at a quantity where “the price is set equal to the marginal cost in both the short and long term. “Because of this result, perfect competition exhibits productive efficiency: things are produced at the lowest feasible average cost” (Luengo-Fernandez et al.).
“The...
SOLUTION.PDF

Answer To This Question Is Available To Download

Related Questions & Answers

More Questions »

Submit New Assignment

Copy and Paste Your Assignment Here