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Author Question: What are the pros and cons of a competitive market in the long ... (Read 95 times)

shofmannx20

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on: Jun 30, 2018
What are the pros and cons of a competitive market in the long run?

Question 2

The total utilities associated with the first 5 units of consumption of good X are 15, 30, 40, 47, and 50, respectively. What is the marginal utility associated with the third unit?
 a. 15.
  b. 70.
  c. 85.
  d. 10.
  e. 45.


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aadams68

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Reply #1 on: Jun 30, 2018
Answer to Question 1

The pros include price equals minimum average total costs and marginal cost. Also, only a normal profit is earned in the long run. The major drawback of a competitive market is that it usually does not promote technological advances (because competitive firms do not earn the profits necessary to enable long-term investments in research and development).

Answer to Question 2

d


shofmannx20

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Reply 2 on: Jun 30, 2018
Thanks for the timely response, appreciate it

isabelt_18

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Reply 3 on: Yesterday
Excellent

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