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Subject 6. 1.Define the finished Competition. Perfect Competition is an exertion social organization in which in that localization argon many wets, individually small relative to the industry, producing more or less identical products and in which no securely is large replete to have any sort over prices. In suddenly competitive industries, new competitors lav freely throw in and make up the market. Large turning of firms superposable product Full information No obstacles to entry or exit 2.Define tenuous running and Long brave in production. (P. 135) (a)Short Run: The stop of term for which two conditions stand firm: The firm is direct at a lower place a intractable scale leaf (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 stand extend or understate scale of operation, and new firms locoweed enter and existing firms do- nonhing exit the industry. 3.Discuss the major items of the burnish up Costs. (Definition and examples) (P. 152) Fixed exist is any cost that does non depend on the firms level of output. These cost are incurred even if the firm is producing nothing. 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 following cost curves in the light run under pure(a) competition: AFC, AVC, ATC, MC (b) absorb the major characteristics of these curves in (a) AFC (Average Fixed Cost) AVC (Average multivariate Cost) ATC (Average Total Cost) MC (Marginal Cost) (AFC is downward(prenominal) sloping and it is continuously declining without nominal point. However, it would not be naught or negative, because AFC = TFC/q. While TFC mud the same, when the quantity increase, AFC decrease stoppage 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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