Assignment Sample on U25292 Economics
Introduction
Complete competition involves a large number of buyers and sellers. Provides detailed information about the price of the goods. The amount of revenue depends on the value of the product and its value. Transaction costs are free and customers receive symmetric information. Medium income is calculated by dividing the total income by amount. The company is always trying to increase its profits in a competitive market (Wieliczko and Floriańczyk, 2022). Complete competition involves big sellers and buyers and no buyers can contribute to prices. In agriculture, firms receive detailed pricing information. Perfect property replacements are easily found in a complete competition. It provides an expanding curve for the needs of individual firms. The company also focuses on increasing profits by calculating all of the company’s revenue and total costs. Estimated income and marginal costs should be commensurate with the increase in profits. In a fully competitive market if a company makes a profit, then many firms will be encouraged to enter the market leading to a change in supply chain to the right. Any company can easily get in and out. The company does not agree to hold market share. Provides standard output of manufactured items. Complete competition does not work with one firm but with various firms where no company controls the market. Consumers receive comprehensive information about product value and prices set by each company. The amount of revenue or profit is estimated at double the value (TR = P * Q). Over time, a company fully engaged in a highly competitive market is operating with zero economic benefits. The corporate demand curve is equal to the equal value available in the market (Thinh, 2022).
Perfect Competition
When the average total cost is less as compared to the price then the firm is generating profit. On the other hand, when the average total cost is more than the price, the firm is facing a loss. A person can generate profit in the short run. Productivity is not always efficient in the short run because marginal cost is not always equal to average cost. To maximize the profit firm, need to select a suitable output in which marginal revenue will be equal to marginal cost. In the short run generally, the company runs at a loss as the capital and revenue generated is less and provide less output (Geng and Fan, 2022). A firm can continue the operation of the price goes above the average variable costs. In the short run, prices are determined by the demand and supply of a particular product. The supply curve includes the marginal cost curves of the firm in the short run.
Profit Maximization
In the long run, the economic profit cannot be retained. The emerging markets shift the demand curve downwards. In the long run profits and losses can be eliminated as many firms produce infinite homogenous items. In the long run, a firm involved in the perfectly competitive market deals with economic profits that are zero (Pawlak, 2022). A firm’s demand curve is equal to the equilibrium price prevailing in the market. In long run, the firm generates output at the minimum average cost curve. The firm also focuses to maximize profits by calculating the firm’s total revenue and its total cost. The marginal revenue and marginal cost must be equal for the profit maximization. In a perfectly competitive market if the firm earns profit, then more firms will be encouraged to enter the market leads to the shifting of the supply curve to the right. In the long-run equilibrium position can be obtained where marginal cost is equal to marginal revenue.
Short and long-run
Estimated income and marginal costs should be commensurate with the increase in profits. In a fully competitive market if a company makes a profit, then many firms will be encouraged to enter the market leading to a change in supply chain to the right (Zand et al., 2022). Any company can easily get in and out. The company does not agree to hold market share. Provides standard output of manufactured items. Complete competition does not work with one firm but with various firms where no company controls the market. Consumers receive comprehensive information about product value and prices set by each company. The amount of revenue or profit is estimated at double the value (TR = P * Q). Over time, a company fully engaged in a highly competitive market is operating with zero economic benefits. The corporate demand curve is equal to the equal value available in the market (Geng and Fan, 2022).
Operating at a loss at a loss in the Short Run
Weather conditions play an important role in agricultural crop productivity. Drought, prolonged rainy season, frost can destroy crops and bring productivity down. Pests are enemies for agricultural land they spoil crops and reduce agricultural growth. They can be controlled by chemical or biological treatments or through crop rotation. Demand and supply in the market are not always fulfilling with an increase in population the demand is rising day by day and to meet its increasing demand the farmers are using chemicals that are having an impact on agricultural productivity (Feher et al., 2022). Farming is becoming competitive day by day so one must know what and how to produce. The government must extend the financial help of top farmers to purchase specific crops.
Long run Supply for a perfectly competitive firm
Economic and weather are affecting the firm to a large extent. Farmers must adopt innovative strategies to promote sales. Agriculture includes various techniques such as crop rotation, use of fertilizers, breeding, etc. Poor transportation and high cost of land and less market knowledge affect farming in many ways. Weather conditions play an important role in agricultural crop productivity (Bassett et al., 2021). Drought, prolonged rainy season, frost can destroy crops and bring productivity down. Other factors like soil, topography, light, water, rainfall determines how the crops will grow. Another important factor that affects productivity is due to less knowledge in farming and the firm sometimes is not well equipped with the latest technology. In a certain region, equipment is not well versed and people handle crops by using their hands. It involves a huge investment of energy and cost and also restricts the total utilization of land. The investment must be done for the introduction of new techniques and new approaches must be formulated on daily basis. The firm must use a farm management policy to increase productivity. So. All these need to be properly maintained for food security.
Long run Profit and Loss
Organic crop production needs to be adopted to control environmental pollution. Environmental challenges can be reduced by adopting crop yields in reduced amounts to ensure food safety. The government must extend the financial help of top farmers to purchase specific crops. Economic and weather are affecting the firm to a large extent. Farmers must adopt innovative strategies to promote sales. The investment must be done for the introduction of new techniques and new approaches must be formulated clearly.
References
Bassett, K., Newsome, L., Sheridan, A. and Azeem, M.M., 2022. Characterizing the changing profile of employment in Australian agriculture. Journal of Rural Studies, 89, pp.316-327.
Feher, A., Stanciu, S., Iancu, T., Adamov, T.C., Ciolac, R.M., Pascalau, R., Banes, A., Raicov, M. and Gosa, V., 2022. Design of the macroeconomic evolution of Romania’s agriculture 2020–2040. Land Use Policy, 112, p.105815.
Geng, W. and Fan, Y., 2022. An imperfectly competitive permit market under a rate-based scheme. Energy Economics, 105, p.105702.
Pawlak, K., 2022. Competitiveness of the EU Agri-Food Sector on the US Market: Worth Reviving Transatlantic Trade?. Agriculture, 12(1), p.23.
Thinh, N.A., 2022. Sustainable Agriculture for Hanoi City: An Application of Thünen’s Agricultural Rings Based on the Gravity Model. In Global Changes and Sustainable Development in Asian Emerging Market Economies Vol. 1 (pp. 273-281). Springer, Cham.
Wieliczko, B. and Floriańczyk, Z., 2022. Priorities for Research on Sustainable Agriculture: The Case of Poland. Energies, 15(1), p.257.
Zand, A., Mohammadi, M. and Ebrahimi Filouri, M.K., 2023. Study of Effective Economic-Social Factors on The ICT in Commercialization of Agriculture in Iran. Agricultural Marketing and Commercialization Journal, 1(1), pp.27-32.
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