Question

Homework (Ch 15) Consider the daily market for hot dogs in a small city. Suppose that this market is in long-run competitive equilibrium with many hot dog stands in the city, each one selling the same kind of hot dogs. Therefore, each vendor is a price taker and possesses no market power MC) curves in the market for hot dogs The following graph shows the demand (D) and supply (S Place the black point (plus symbol) on the graph to indicate the market price and quantity that will result from competition ? Competitive Market 5.0 4.5 PC Outcome 4.0 3.5 은 3.0 2.5 2.0 S-MC 1.5 1.0 0.5 225 270 315 0 45 90 135 180 360 405 450 QUANTITY (Hot dogs) PRICE (Dollars per hot dog)

Answer 1

Answer :

Competitive Manket 4-0 SPMC 15+ R35 360 quantity C Hot dogs Paice (per hot dog)

Monopaly Manket 440 3.5 Loss Beadave'gh Mc MR 135 180 + D 360 Quantity + X Price

Competitive market : Price = $1.5 and quantity = 225 hot dogs.

Monopoly market : Price = $2.5 and quantity = 135 hot dogs.

Now we can summary that the price is lower in competitive market and quantity is higher in competitive market .