« previous next »

Author Question: Why are perfectly competitive markets considered efficient? What will be an ideal ... (Read 37 times)

gbarreiro

  • Hero Member
  • *****
  • Posts: 566
on: Jun 29, 2018
Why are perfectly competitive markets considered efficient?
 
  What will be an ideal response?

Question 2

Which of the following items is not a factor of production?
 
  A. An oil rig in the Gulf of Mexico
  B. A ski jump in Utah
  C. A bank loan to a farmer
  D. An orange grove in Florida


jliusyl

  • Sr. Member
  • ****
  • Posts: 328
Reply #1 on: Jun 29, 2018
Answer to Question 1

Perfectly competitive markets are forced to be efficient by free entry and exit. Competitive firms produce at the minimum point on their average cost curve, produce where price equals marginal cost, and have zero economic profits.

Answer to Question 2

C Answer C is not a factor of production because it is financial capital; see page 35.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

Pope Sylvester II tried to introduce Arabic numbers into Europe between the years 999 and 1003, but their use did not catch on for a few more centuries, and Roman numerals continued to be the primary number system.

Did you know?

Once thought to have neurofibromatosis, Joseph Merrick (also known as "the elephant man") is now, in retrospect, thought by clinical experts to have had Proteus syndrome. This endocrine disease causes continued and abnormal growth of the bones, muscles, skin, and so on and can become completely debilitating with severe deformities occurring anywhere on the body.

Did you know?

Anesthesia awareness is a potentially disturbing adverse effect wherein patients who have been paralyzed with muscle relaxants may awaken. They may be aware of their surroundings but unable to communicate or move. Neurologic monitoring equipment that helps to more closely check the patient's anesthesia stages is now available to avoid the occurrence of anesthesia awareness.

Did you know?

The heart is located in the center of the chest, with part of it tipped slightly so that it taps against the left side of the chest.

Did you know?

Malaria was not eliminated in the United States until 1951. The term eliminated means that no new cases arise in a country for 3 years.

The Railroads: Moving Agricultural Products to Eastern Markets, 1890 The Railroads: Moving Agricultural Products to Eastern Markets, 1890
Modern commercial fishing is highly efficient Modern commercial fishing is highly efficient
Strategic Management and Competitive Advantage: Concepts and Cases, 6th Edition Strategic Management and Competitive Advantage: Concepts and Cases, 6th Edition
Juan's Software Service Company is in a perfectly competitive market. Juan has total fixed ... Juan's Software Service Company is in a perfectly competitive market. Juan has total fixed ...
Competitive firms and maximization Competitive firms and maximization
For the circuit in Figure 1, assume ideal diodes. The peak inverse voltage is approximately For the circuit in Figure 1, assume ideal diodes. The peak inverse voltage is approximately
Video: Carbon fixing adaptations Animation

For a complete list of videos, visit our video library