How do monopolies compare with competitive markets?
Part 1 The quantity produced by a monopoly is a competitive market would produce.
Part 2 Monopolies charge prices that are than competitive markets.
Part 3 In the long run, incentives cause firms in to lower costs and increase quality
Homework Answers
a) The quantity produced by the monopoly is "less than " the competitive market as monopoly will produce at the point where the MR and the MC are equal and perfect market will produce at a point where the p=MC.
b) The price that the monopoly charge will be higher than the perfect market.
c) IN the long run, incentive cause firms in perfect market to lower cost and increase the quantity.
Ceteris paribus, how do the demand elasticities of perfectly competitive firms compare with imperfectly competitive firms?...
Ceteris paribus, how do the demand elasticities of perfectly competitive firms compare with imperfectly competitive firms? If you ran a business, would you prefer to be a monopoly or a perfectly competitive firm? Why? Finally, and only tangentially related, are monopolies guaranteed a profit? Why or why not?
INQUIZITIVE W20040C Chapter 10: Understanding Monopoly e Page(s) 313-316 10.2. How much do monopolies charge, and...
INQUIZITIVE W20040C Chapter 10: Understanding Monopoly e Page(s) 313-316 10.2. How much do monopolies charge, and how much do they produce? Perfectly competitive and monopoly firms are complete opposites. Drag word(s) below to fill in the blank(s) in the passage. The monopoly demand curve is: while the perfectly competitive firm's demand curve is This is because a monopoly is the only producer in an industry, so the monopoly firm's curve is the same as the market demand curve, while the...
Suppose the market for wheat is perfectly competitive. Suppose further the long-run supply curve in this...
Suppose the market for wheat is perfectly competitive. Suppose further the long-run supply curve in this market is increasing. Explain briefly if and how each of the following varies as market quantity increases: i) The number of firms ii) Input prices iii) Long-run profits Suppose firms in a monopoly competitive market produce their profit-maximizing quantity, and their average total cost equals their marginal revenue. Should firm entry or exit in the long run?
2. From the perspective of consumers and society overall, monopolies are worse than perfectly competitive markets....
2. From the perspective of consumers and society overall, monopolies are worse than perfectly competitive markets. This is the major reason behind the existence of US anti- trust laws. Describe a situation, however, where monopolies are good for consumers and why. (Hints: Is perfect competition always the right comparison? What kinds of costs typically lead to industries where a monopoly may benefit consumers?)
In the long run, all of the firms in a perfectly competitive industry will: exit the...
In the long run, all of the firms in a perfectly competitive industry will: exit the industry if price is greater than average total cost. produce at an output level at which average total cost equals marginal cost. earn an economic profit greater than zero. O produce an output level at which price is greater than average total cost. Which statement about the differences between monopoly and perfect competition is INCORRECT? A monopoly will charge a higher price and produce...
Question 34 Patents, copyrights, and trademarks Question 34 options: are examples of government-created monopolies. allow their...
Question 34 Patents, copyrights, and trademarks Question 34 options: are examples of government-created monopolies. allow their owners to reduce the costs of what they produce. generate more revenue for the government than they cost consumers in the form of higher prices. All of the above are correct. Save Question 35 A market structure with barriers to entry is Question 35 options: a monopoly. oligopolistically competitive. monopolistically competitive. perfectly competitive. Save Question 36 The production function is Question 36 options: the...
The Prisoner's Dilemma utilizes game theory to explain behavior of firms in: Markets characterized by natural...
The Prisoner's Dilemma utilizes game theory to explain behavior of firms in: Markets characterized by natural monopoly. Monopoly markets. Perfectly competitive markets. Monopolistically competitive markets. Oligopoly markets At 500 units of output, total costs = $50,000 and total variable cost = $5,000. What does average fixed costs (ATC) equal at 500 units? $45,000 $50. $100. $90. Statement 1: Marginal cost pricing occurs when the market price of a good is equal to the marginal cost of the last unit of...
The perfectly competitive firm's demand curve is: Perfectly elastic. Relatively elastic Perfectly inelastic. Relatively inelastic Statement...
The perfectly competitive firm's demand curve is: Perfectly elastic. Relatively elastic Perfectly inelastic. Relatively inelastic Statement 1: In the long run, firms in a monopolistically competitive industry will be producing that quantity that maximize social surplus. Statement 2: In the long run, firms in a monopolistically competitive industry will be producing at the minimum of its ATC curve. Statement (1) is true; statement (2) is false. Statements (1) and (2) are both true. Statement (1) is false; statement (2) is...
Which of these statements regarding the differences between monopoly and a competitive market are true? Choose...
Which of these statements regarding the differences between monopoly and a competitive market are true? Choose one or more: A. There are more firms in a competitive market than in a monopoly. B. A monopolist can earn profits in the long run, but a firm in a perfectly competitive market cannot. C. A monopoly is a price maker, while a competitive firm is a price taker. D. A monopolist will produce less than the output produced in a perfectly competitive market.
1. Characteristics of competitive markets The model of competitive markets relies on the following four core assumptions:
1. Characteristics of competitive markets The model of competitive markets relies on the following four core assumptions: 1. There must be many buyers and sellers, none of which is large in relation to total sales or purchases. In other words, a few players can't dominate the entire market. 2. Each firm produces and seills a homogeneous product that is indistinguishable from all other firms' products in a given industry. That is, buyers must regard all sellers" products as equivalent, or identical. 3. Buyers and...
INQUIZITIVE W20040C Chapter 10: Understanding Monopoly e Page(s) 313-316 10.2. How much do monopolies charge, and how much do they produce? Perfectly competitive and monopoly firms are complete opposites. Drag word(s) below to fill in the blank(s) in the passage. The monopoly demand curve is: while the perfectly competitive firm's demand curve is This is because a monopoly is the only producer in an industry, so the monopoly firm's curve is the same as the market demand curve, while the...
2. From the perspective of consumers and society overall, monopolies are worse than perfectly competitive markets. This is the major reason behind the existence of US anti- trust laws. Describe a situation, however, where monopolies are good for consumers and why. (Hints: Is perfect competition always the right comparison? What kinds of costs typically lead to industries where a monopoly may benefit consumers?)
In the long run, all of the firms in a perfectly competitive industry will: exit the industry if price is greater than average total cost. produce at an output level at which average total cost equals marginal cost. earn an economic profit greater than zero. O produce an output level at which price is greater than average total cost. Which statement about the differences between monopoly and perfect competition is INCORRECT? A monopoly will charge a higher price and produce...
The Prisoner's Dilemma utilizes game theory to explain behavior of firms in: Markets characterized by natural monopoly. Monopoly markets. Perfectly competitive markets. Monopolistically competitive markets. Oligopoly markets At 500 units of output, total costs = $50,000 and total variable cost = $5,000. What does average fixed costs (ATC) equal at 500 units? $45,000 $50. $100. $90. Statement 1: Marginal cost pricing occurs when the market price of a good is equal to the marginal cost of the last unit of...
The perfectly competitive firm's demand curve is: Perfectly elastic. Relatively elastic Perfectly inelastic. Relatively inelastic Statement 1: In the long run, firms in a monopolistically competitive industry will be producing that quantity that maximize social surplus. Statement 2: In the long run, firms in a monopolistically competitive industry will be producing at the minimum of its ATC curve. Statement (1) is true; statement (2) is false. Statements (1) and (2) are both true. Statement (1) is false; statement (2) is...
Which of these statements regarding the differences between monopoly and a competitive market are true? Choose one or more: A. There are more firms in a competitive market than in a monopoly. B. A monopolist can earn profits in the long run, but a firm in a perfectly competitive market cannot. C. A monopoly is a price maker, while a competitive firm is a price taker. D. A monopolist will produce less than the output produced in a perfectly competitive market.
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