This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Describe the process by which the competitive market establishes a price at which all firms are just ... (Read 19 times)

TVarnum

  • Hero Member
  • *****
  • Posts: 548
on: Jul 1, 2018
Describe the process by which the competitive market establishes a price at which all firms are just earning normal profits.
 
  What will be an ideal response?

Question 2

Joe's demand for spring water can be represented as p = 10 - Q (where p is measured in /gallon and Q is measured in gallons). He recently discovered a spring where water can be obtained free of charge. His consumer surplus from this water is
 
  A) 0.
  B) 50.
  C) 100.
  D) unknown based upon the information provided.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

momtoalll

  • Sr. Member
  • ****
  • Posts: 326
Reply #1 on: Jul 1, 2018
Answer to Question 1

Above normal profits will entice new firms to enter the industry, thereby driving down market price and firm profits until they reach the normal level, after which no additional firms enter the industry. Below normal profits will cause some firms to exit the industry, thereby raising market price and firm profits until the normal level is reestablished, and no further firms exit the industry.

Answer to Question 2

B


TVarnum

  • Member
  • Posts: 548
Reply 2 on: Jul 1, 2018
Great answer, keep it coming :)

marict

  • Member
  • Posts: 304
Reply 3 on: Yesterday
Wow, this really help

« previous next »
 

Did you know?

Street names for barbiturates include reds, red devils, yellow jackets, blue heavens, Christmas trees, and rainbows. They are commonly referred to as downers.

Did you know?

Vaccines cause herd immunity. If the majority of people in a community have been vaccinated against a disease, an unvaccinated person is less likely to get the disease since others are less likely to become sick from it and spread the disease.

Did you know?

More than one-third of adult Americans are obese. Diseases that kill the largest number of people annually, such as heart disease, cancer, diabetes, stroke, and hypertension, can be attributed to diet.

Did you know?

Drug abusers experience the following scenario: The pleasure given by their drug (or drugs) of choice is so strong that it is difficult to eradicate even after years of staying away from the substances involved. Certain triggers may cause a drug abuser to relapse. Research shows that long-term drug abuse results in significant changes in brain function that persist long after an individual stops using drugs. It is most important to realize that the same is true of not just illegal substances but alcohol and tobacco as well.

Did you know?

Sperm cells are so tiny that 400 to 500 million (400,000,000–500,000,000) of them fit onto 1 tsp.

A hypothetical scenario illustrating the process of chemical selection A hypothetical scenario illustrating the process of chemical selection
The Clotting Process The Clotting Process
Thoracic cage. Avoid heavy pressure over the sternum and xiphoid process; caution over rib cage. Thoracic cage. Avoid heavy pressure over the sternum and xiphoid process; caution over rib cage.
Basic process of metabolic profiling Basic process of metabolic profiling
Energy imbalance establishes a temperature gradient between the tropics and the poles Energy imbalance establishes a temperature gradient between the tropics and the poles
Diagrammatic representation of the process of molecular hybridization Diagrammatic representation of the process of molecular hybridization
Video: Summation - defined, spatial, temporal & AP generation or not

For a complete list of videos, visit our video library