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Which of the following is a firm effect that has an impact on the competitive advantage of a firm?

A. The exit barriers within the industry in which the firm operates
B. The number of companies operating in the industry in which the firm operates
C. The intensity of rivalry among existing companies in the firm's chosen industry
D. The value and the cost position of the firm relative to its competitors

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Sonal Bahl
Sonal BahlLv10
15 Mar 2021

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Related questions

1. Suppose you are given the following information about a particular industry:

Market demand : Q^D = 6500-100P 

Market supply : Q^S = 1200P 

Firm total cost function: C(q) = 722 + q^2/200 

Firm marginal cost function: MC(q)=2q/200 

Assume that all firms are identical and that the market is competitive.

a. Find the equilibrium market price and quantity, the output supplied by the firm, and the firm's profits.

b. Would you expect to see entry into or exit from the industry in the long-run? Explain. What effect will entry or exit have on market equilibrium?

c. What is the lowest price at which each firm would sell its output in the long run? Is profit positive, negative, or zero at this price? Explain.

d.What is the lowest price at which each firm would sell its output in the short run? Is profit positive, negative, or zero at this price? Explain.

 

1. If the ATC curve is above the demand curve in a perfectly competitive firm, the firm will have a:
- profit
- loss
- break-even
- price floor
 
2. If the ATC curve is below the demand curve in a perfectly competitive firm, the firm will have a:
- profit
- loss
- break-even
- price ceiling
 
3. Even if in the short run, a perfectly competitive firm has a profit; in the long run, they always break even because:
- low barriers to entry
- profit incentives attract new firms
- perfectly homogenous products
- all of the above
 
4. A perfect competitor would:
- never charge above market price but might charge below market price
- never charge below market price but might charge above market price
- always change the market price
- none of the above
 
5. The crucial aspect of competition among firms that leads to the condition of zero profits in the long run is
- the number of firms in the industry is fixed
- free entry and exit of firms in the industry
- fixed costs equal zero
- all costs are at their least cost level.
 

1. Suppose you are given the following information about a particular industry:

Market Demand: QD = 6500 - 100P and Market Supply: QS = 1200P

Firm Total Cost Function: C(q) = 1500 + q2/200

Assume that all firms are identical, and that the market is competitive.

a.Find the equilibrium market price and quantity, and the firm's output and profits.

b.Would you expect to see entry into or exit from the industry in the long-run? Explain. What effect will entry or exit have on market equilibrium?

c.What is the lowest price at which each firm would sell its output in the long run? Is profit positive, negative, or zero at this price? Explain.

d.What is the lowest price at which each firm would sell its output in the short run? Is profit positive, negative, or zero at this price? Explain.

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