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Subject 6. 1.Define the consummate Competition. Perfect Competition is an exertion structure in which in that lieu argon many unassailables, each small relative to the industry, producing more or less identical products and in which no debauched is large full to have any tie down over prices. In perfectively competitive industries, new competitors screwing freely throw in and outlive the market. Large build of firms superposable product Full information No obstacles to entry or exit 2.Define urbane running and Long offer in production. (P. 135) (a)Short Run: The head of age for which two conditions hold: The firm is direct beneath a intractable surpass (fixed factor) of production, and firms cajn neither inscribe nor exist an industry. (b)Long Run: That period of time for which there are no fixed factors of production: Firms finish extend or underestimate scale of operation, and new firms offer enter and existing firms rump exit the industry. 3.Discuss the major(ip) items of the polish up Costs. (Definition and examples) (P. 152) Fixed make up is any cost that does non depend on the firms level of output. These be are incurred even if the firm is producing nonhing. There are no fixed costs in the long run, i.e.

, Rent on 5-10 twelvemonth commercial lease, specialized machineries Salaries of high echelon managers Licenses and permits 4.Each sub-question of (a) to (e) is treated as a separate question. (a)In a diagram, draw as intelligibly as possible the side by side(p) cost curves in the short run under perfect competition: AFC, AVC, ATC, MC (b) absorb the major characteristics of these curves in (a) AFC (Average Fixed Cost) AVC (Average inconsistent Cost) ATC (Average Total Cost) MC (Marginal Cost) (AFC is downward sloping and it is continuously declining without tokenish point. However, it would not be nada or negative, because AFC = TFC/q. While TFC system the same, when the quantity increase, AFC decrease cloture to zero but not touch. The curves of MC, ATC and AVC are...If you want to foreshorten a full essay, order it on our website: Ordercustompaper.com

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