polistic competition, which of the following um conditions for a firm? TC; MR=MC; P>MC TC; MR>MC; P=MC TC; MR=MC; P>MC TC; MR=MC; P=MC TC; MR>MC; P>MC
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- There are two groups of firms below. Group 1: firms in the retail sector (e.g. Amazon; Wal-Mart; Target; Kohl's; Sears; Macy's) Group 2: firms in the wireless services industry (e.g. Verizon; AT & T; Sprint/T-Mobile) (this about telecommunication services, not about the sale of phones) For each group determine and explain if the group is monopolistic competitive or an oligopoly. You need to specific for both in which market structure the firms operate) Then choose one of the firms from one group. Using a Porter's analysis what are the threat to profitability?Briefly state the basic characteristics of pure competition, pure monopoly, monopolistic competition, and oligopoly. Under which of these market classififications does each of the following most accurately fifit? (a ) a supermarket in your hometown; (b) the steel industry; (c) a Kansas wheat farm; (d) the commercial bank in which you or your family has an account; (e) the automobile industry. In each case justify your classification.Firms compete in different types of market structures. In the real world, most markets are either monopolistically competitive or oligopolistic, and a few markets have a monopoly. Note that perfect competition is rare because no market has all the characteristics of a perfectly competitive market as described by the theory of perfect competition. Explain which firm is likely to face a more elastic demand curve: a monopoly or a pizza shop?
- If monopolistically competitive firms have some control over their price, why don’t they set price above ATC so they will realize an economic profit in the long run? Why do monopolistically competitive firms spend funds for the product development and advertising when this practice only adds to the firm’s costs? Explain how concentration ratios and barriers to entry into the market relate to Monopolistic Competition and OligopolyBriefly state the basic characteristics of pure competition, pure monopoly, monopolistic competition, and oligopoly. Under which of these market classifications does each of the following most accurately fit? (a) a supermarket in your hometown; (b) the steel industry; (c) a Kansas wheat farm; (d) the commercial bank in which you or your family has an account; (e) the automobile industry. In each case, justify your classification.encient? Suppose that a company operates in the monopolistically competitive market for electric razors. The following graph shows the demand curve, marginal revenue (MR) curve, marginal cost (MC) curve, and average total cost (ATC) curve for the firm. Place a black point (plus symbol) on the graph to indicate the long-run monopolistically competitive equilibrium price and quantity for this firm. Next, place a grey point (star symbol) to indicate the minimum average total cost the firm faces and the quantity associated with that cost. 3; 100 50 90 80 88 + 70 70 60 550 40 PRICE (Dollars per razor) 30 30 10 MC 20 20 0 10 10 ATC +. ? Mon Comp Outcome MR Demand 20 30 40 50 60 70 80 90 100 QUANTITY (Thousands of razors) Min Unit Cost
- WHAT IS THE DIFFERENCE BETWEEN MONOPOLY AND OLIGOPOLY? PROVIDE EXAMPLES. WHAT IS A MONOPOLISTIC COMPETITION? PROVIDE EXAMPLE. WHAT IS A PERFECT COMPETITION? PROVIDE EXAMPLE SITUATIONSSuppose a country's mobile phone industry is supplied by only two firms (i.e. an oligopoly). Explain how the presence of two firms affects the price elasticity of demand of each firm's output.The figure below shows the demand (D, MR) and cost (MC, ATC) curves for six oligopolies in the chewing gum industry. Assume that all 6 firms have the same identical cost curves. Demand and cost conditions for the Chewing Gum Industry $4 Dollars .40 .35 .25 MC MR a. 12,000; $.40 b. 14,000; $.30 c. 16,000; $.35 d. 12,000; $.25 ATC D 0 12 14 16 Packs of chewing gum in thousands Suppose the six firms that produce chewing gum form a cartel. The cartel faces the market demand curve given by D in the figure above. To maximize profits, the cartel should produce packs of chewing gum and the price should be
- Consider a monopolistically competitive market in long-run equilibrium, and a firm that is in the market. Suppose there is a shortage of a key input, so that every firm's ATC curve shifts up by a fixed amount. If the firm remains in the market in the new long-run equilibrium, what happens to the price at which it sells the good, and what quantity does it sell? Price goes down, quantity stays the same Price goes up, quantity stays the same Price goes down, quantity goes down Price goes up, quantity goes downIn both perfectly competitive and monopolistically competitive markets, when firms are making positive economic profits, other firms willenter until price equals ATC and profits are zero.Despite these similarities, in a perfectly competitive market total surplus is maximized, while ina monopolistically competitive market surplus isnot maximized. Explain this difference.In the model of monopolistic competition, industry, then we should expect industry. fixed costs; more marginal costs; less marginal costs; more fixed costs; less if an industry has large relative to another firms to operate in a long-run equilibrium of that
