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Question 1
a. With the aid of a diagram explain how a monopolist determines how much
output to produce and what price to charge. [4 marks]
b. Explain how the
down in the short run. [4 marks]
c. Explain why firms operating in monopolistically competitive markets probably
will not earn an economic profit in the long run. [4 marks]
d. Why does interdependence of firms play a major role in oligopoly but not in
perfect competition or
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- Question 1 With the aid of a diagram explain how a monopolist determines how much output to produce and what price to charge. a) Explain how the perfectly competitive firm decides whether to operate or shut down in the short run. b) Explain why firms operating in monopolistically competitive markets probably will not earn an economic profit in the long run. c) Why does interdependence of firms play a major role in oligopoly but not in perfect competition or monopolistic competition?|Question 1a. With the aid of a diagram explain how a monopolist determines how much output to produce and what price to charge. b. Explain how the perfectly competitive firm decides whether to operate or shut down in the short run. c. Explain why firms operating in monopolistically competitive markets probably will not earn an economic profit in the long run. d. Why does interdependence of firms play a major role in oligopoly but not in perfect competition or monopolistic competition? Question 2a. A producer borrows money and starts a business. He himself looks after the business. Identify implicit and explicit costs from this information. Explain. b. List and explain which of the following is a fixed cost or a variable cost for Caribbean Airlines. i. The cost of fuel used in its planes. ii. The rent on its Piarco headquarters. iii. The lease payments on its current inventory of jets. iv. The cost of peanuts it serves to passengers. v. The salary paid to the Chief Executive Officer. c.…With the aid of a diagram explain how a monopolist determines how much output to produce and what price to charge. Explain how the perfectly competitive firm decides whether to operate or shut down in the short run. Explain why firms operating in monopolistically competitive markets probably will not earn an economic profit in the long run. Why does interdependence of firms play a major role in oligopoly but not in perfect competition or monopolistic competition?
- #3) Draw a diagram of the long run equilibrium in a monopolistically competitive market. How is price related to average total cost? How is price related to marginal cost?Question 1 a.With the aid of a diagram explain how a monopolist determines how much output to produce and what price to charge. b.Explain how the perfectly competitive firm decides whether to operate or shut down in the short run. c.Explain why firms operating in monopolistically competitive markets probably will not earn an economic profit in the long run. d.Why does the interdependence of firms play a major role in oligopoly but not in perfect competition or monopolistic competition?Question 1 a. With the aid of a diagram explain how a monopolist determines how much output to produce and what price to charge. b. Explain how the perfectly competitive firm decides whether to operate or shut down in the short run. c. Explain why firms operating in monopolistically competitive markets probably will not earn an economic profit in the long run. d. Why does interdependence of firms play a major role in oligopoly but not in perfect competition or monopolistic competition?
- The mobile phone industry is monopolistically competitive, and is described by Diagram A and Diagram B above. Samsung pursued a successful differentiation strategy and, as a result, is making a positive economic profit in the short run. A: Identify the area that represents consumer surplus. B: Explain how the other firms producing mobile phones would react to Samsung’s short-run positive economic profit. What would be the long-run impact on Samsung’s output, price and profit? C: In the long run, Samsung is inefficient and has excess capacity. Identify the inefficiency and excess capacity on the long-run diagram and explain why they occur.How might advertising make markets less competitive? How might it make markets more competitive? Give the arguments for and against brand names. What are the three reasons that a market might have a monopoly? Give two examples of monopolies, and explain the reason for each. List the three key attributes of monopolistic competition. What kind of agreements is illegal for businesses to make? What is meant by competitive firm? what is meant Perfect competition? what is market structure? What is economics?With the aid of a diagram explain how a monopolist determines how much output to produce and what price to charge. b. Explain how the perfectly competitive firm decides whether to operate or shut down in the short run. c. Explain why firms operating in monopolistically competitive markets probably will not earn an economic profit in the long run. d. Why does interdependence of firms play a major role in oligopoly but not in perfect competition or monopolistic competition? Question 2a. A producer borrows money and starts a business. He himself looks after the business. Identify implicit and explicit costs from this information. Explain. b. List and explain which of the following is a fixed cost or a variable cost for Caribbean Airlines. i. The cost of fuel used in its planes. ii. The rent on its Piarco headquarters. iii. The lease payments on its current inventory of jets. iv. The cost of peanuts it serves to passengers. v. The salary paid to the Chief Executive Officer. c. How is…
- A perfectly competitive firm is onsidered to be more generous in terms of price and quantity of output in comparison to firm belonged to monopoly and monopolistic markets. C. If firms incurring loss in this market begin to exit the market, what will happen to the market equilibrium? Demonstrate your answer using a simplified graph. d. The firm wishes to supply output more than the quantity determined under the equilibrium condition, is it worth to pursue?What are the “monopolistic” and the “competitive” elements of monopolistic competition?Instructions: In order to receive full credit, you must make a selection for each option. For correct answer(s), click the box once to place a check mark. For incorrect answer(s), click twice to empty the box.Similar to a monopoly, a monopolistic competitor: can restrict output to increase price (at least in the short run).checked can make profits or losses in the short run.unanswered faces a downward-sloping demand curve.unanswered faces high barriers to entry.unanswered makes economic profits in the long run.unanswered produces where P > MR = MC.unanswered has one seller.unanswered Instructions: In order to receive full credit, you must make a selection for each option. For correct answer(s), click the box once to place a check mark. For incorrect answer(s), click twice to empty the box.Similar to a perfect competitor, a monopolistic competitor: faces a perfectly elastic demand…1. Consider a monopolistically competitive market with N firms. Each firm's business opportunities are described by the following equations: 100 Q(P) =- - P N C(Q) = 50 + Q² a. How does N, the number of firms in the market, affect each firm's demand curve? Why? b. How many units does each firm produce? (The answers to this and the next two questions depend on N.) c. What price does each firm charge? d. How much profit does each firm make? e. In the long run, how many firms will exist in this market?
