Please answer the following questions. Submit as a Microsoft Word® document to the Dropbox when completed. 1. How does the demand curve faced by a perfectly competitive firm differ from the market demand curve in a perfectly competitive market? Explain. The market demand curve will slope downwards‚ while the demand curve for the individual firm is flat or perfectly elastic‚ reflecting the fact that the individual takes the market price as given. The difference in the slopes of the market demand
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Marginal Revenue: Marginal Revenue can be termed as the change in the total revenue from an additional unit that is sold by a firm. Example‚ the total revenue when 10 units are sold is $50‚ and total revenue when 11 units are sold is $55. Marginal Revenue in this case will be (55-50)/(11-10) = $5. One can compute the total revenue if the marginal revue and the number of units sold. If the marginal revenue of a product is zero than the total revenue will not change with an increase in the number
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Supply‚ Demand and Price Elasticity People and companies make economic decisions on a daily basis by deciding how much of something they will buy and what prices they are willing to pay for the goods or services. Through individual decision-making‚ consumers determine supply demands for their needs and wants‚ and companies decide which goods and how many goods are to be sold‚ and how much to charge consumers. There are many fundamental concepts and definitions that are important to understanding
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Week two of class has been dedicated to discuss and explain how supply and demand determines the price and quantity of goods and services within a competitive market structure; examine how normal‚ inferior‚ substitutes and complement goods affects the supply and demand structure; and explain how and why surplus and shortages can occur with various goods and services. There are two parts for this assignment that covers material in chapter four. Part one asks the following: Many industries have gradually
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ECO 561 Economics March 12‚ 2012 Abstract The following paper discusses a business proposal on hair extensions. The proposal will include profit maximization strategy‚ how to increase revenue‚ entry into the market. The proposal will also look at product differentiation and the mix of pricing and non-pricing strategies to increase revenue as well as pricing and non-pricing strategies for hair extensions under the current business cycle in the United
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Week I Quiz Results/Answers ECO561 1. Revenue increases when * producer surplus increases 2. An increase in the price of an inelastic good * increases revenues 3. Price elasticity of Demand increases when * people become less price sensitive over time 4. The purpose of a market in a market system is to * bring buyers and sellers into contact 5. By specializing in the production of one good‚ a company is able to benefit from economies of scale which increases its revenue. Which
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The concentrating distribution of the enterprise The producing enterprise of jaw crusher industry in China mostly gradually derive from the early enterprises of the industry‚ the geographical location is relatively centered and the personnel structure exists serious defect. So far‚ the enterprise is mainly distributed in the Jiangsu‚ Zhejiang‚ Shanghai‚ Liaoning‚ Heilongjiang‚ the enterprise of this several area businesses is accounted for almost 50% of the total number of entire industry‚ what
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A Case Study on Aldi I. Introduction The retail industry is a very competitive market. Organizations need to offer customers value for money. Customers want to pay for low priced but high quality products. With such hard competition it is necessary for organizations to know what their customers want. Aldi recognizes that its customers want value for money but do not want to compromise on quality. This case study will show how Aldi’s strategy led them to a competitive advantage. It will
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Maximizing Profits in Market Structures Student Name XECO/212 Month Day‚ Year Instructor Name The three important market structures in economics are competitive markets‚ monopolies‚ and oligopolies. Each market plays a different role in the economy. Competitive markets are when no firm has the power to affect the market price of a good and “many buyers and sellers trading identical products so that each buyer and seller is a price taker”
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* Would the introduction of maximum prices by a government solve the problem of scarcity: Scarcity results from scarce resources and unlimited wants. An effective maximum price would be set below the market equilibrium. Unless the government took additional measures it would result in excess demand and a smaller quantity sold at a lower price. While some would benefit from lower prices others would now go without the good. Overall the action would not reduce the level of scarcity. * Discuss
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