Question

See this question in the app . Compare the monopoly firm to competitive firm in all of their aspects. 2. Given the following demand function of shoes facing Ahmad's company Q = 1,500 200P Where Q is quantity sales of shoes and P is price. A. How many shoes could Ahmad sell at $4.50 each? B. What price would Ahmad's company have to charge to sell 900 shoes? C. At what price would shoes sales equal zero? 3. Find the equilibrium price and equilibrium quantity from the following relations describes demand and supply conditions in a given industry, OD = 80000 - 20000P (Demand) 05 - 20000 20000P (Supply) Where is quantity and P is price in dollars. 4. Calculate the midpoint price elasticity of demand using the price of $5 and $7. The demand function is: Q = 1,500 - 200P Where is quantity demanded and Pis price. Show transcribed image text Expert Answer Anonymous answer

Answer 1

1) Comparison of Monopoly and competitive firm

• A monopoly firm is a single seller in the market and does not face and competition from others. A competitive firm, on the other hand, faces a lot of competition from similar firms situated in the market.
• A monopoly firm can control the supply of its product whereas the perfectly competitive firm cannot do so.
• A monopoly can set the price as it wants but a perfectly competitive firm has to take price as given and cannot influence the price of the product.
• A monopoly faces a downward-sloping demand whereas a perfectly competitive firm faces a horizontal demand curve.
• Monopoly sets the price higher than marginal cost but a perfectly competitive firm's price cannot exceed the marginal costs because there are other sellers willing to supply at the same price.
• A monopoly earns a higher profit by selling a small amount of quantity at a higher price whereas the perfectly competitive firm earns a normal profit.

2.A) At price = $4.50, Ahmed can sell 600 shoes (1,500 - 200*4.50, putting price in the demand equation).

2.B) When the quantity is 900 shoes, then

Q = 1,500 - 200P

900 = 1,500 - 200P

P = 600/200 = $3

2.C) When quantity of shoes = 0, then

0 =1,500 - 200P

P = 1,500/200

P =$7.5

As per the guidelines, the first four subparts have to be answered. Thanks!