a. A firm operating under perfect competition is earning an economic profit of K20 million in the long run? Is this a feasible outcome and why? b. What are the implications of a having a Kinked Demand cure under Oligopoly markets? c. What is the key difference between perfect competition and monopolistic competition?

a. A firm operating under perfect competition is earning an economic profit of K20 million in the long run? Is this a feasible outcome and why? b. What are the implications of a having a Kinked Demand cure under Oligopoly markets? c. What is the key difference between perfect competition and monopolistic competition?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter10: Monopolistic Competition And Oligopoly

Section: Chapter Questions

Problem 2SCQ: Continuing with the scenario in question 1, in the long run, the positive economic profits that the...

See similar textbooks

Similar questions

Continuing with the scenario in question 1, in the long run, the positive economic profits that the monopolistic competitor earns will attract a response either from existing firms in the industry or film outside. As those films capture the original films profit, what will happen to the original films profit-maximizing price and output levels?
Consider the curve in the figure below, which shows the market demand. marginal cost, and marginal revenue curve for firms in an oligopolistic industry. In this example, we assume firms have zero fixed costs. Suppose the firms collude to form a cartel. What price will the cartel charge? What quantity will the cartel supply? How much profit will the cartel earn? Suppose now that the cane] breaks up and the oligopolistic firms compete as vigorously as possible by cutting the price and increasing sales. What will be the industry quantity and price? What will be the collective profits of all firms in the industry? Compare the equilibrium price, quantity, and profit for the cartel and cutthroat competition outcomes.
Question 6 (a) Why is Perfect Competition considered to display high level of economic efficiency? (b) How does monopoly result in a dead-weight loss? Illustrate with diagram. (a) How is oligopoly different from monopolistic competition? (b) Illustrate and explain how the oligopolistic firms determines their collective profit by maximizing price and output levels when they collude and act like a cartel (monopoly). Question 7 (a) What are the main causes of market failure? Give one example and illustrate using a diagram. (b) Explain the difference between private costs and social costs. (c) Government of Country X is considering implementing a tax on fizzy drinks. Using a demand and supply diagram, illustrate what effect the tax will have on the market of fizzy drinks. (d) For what purposes does government use taxes-both at micro and macroeconomic level?
This is a Microeconomics problem. (a) Give 2 reasons why the market structure of monopolistic competition may not necessarily require government regulation the way a monopoly market would. (b) What is a reaction curve in an oligopolistic market? (c) Describe the Stackelberg model and explain how the first mover in such a model gets an "advantage"?
a. Explain what you know about collusion and cartels, including: definition, formation of motives, types and differences between these types, and so on. b. Why is this behavior often encountered in imperfectly competitive market structures such as oligopolies? c. What obstacles/obstacles do collusion and cartels often face? d. Name and explain at least 3 factors that can facilitate the occurrence of collusion and cartel!
d. Why does interdependence of firms play a major role in oligopoly but not in perfect competition or monopolistic competition?
How many real industries can you name that are oli-gopolies? How many operate under monopolistic com-petition? Perfect competition? Which of these is most difficult to find in reality? Why?
just answer the subpart d a. Explain what you know about collusion and cartels, including: definition, formation of motives, types and differences between these types, and so on. b. Why is this behavior often encountered in imperfectly competitive market structures such as oligopolies? c. What obstacles/obstacles do collusion and cartels often face? d. Name and explain at least 3 factors that can facilitate the occurrence of collusion and cartel!
Only typed answer why is the pharmaceutical sector is an example of oligopoly.
Q 03: How do oligopolies works? Give one example of each? How is the market structure different on the base of brand loyalty and price value?
Q2. Which model's equilibrium price and quantity most closely matches perfect competition? a. Bertrand Competition with Identical Goods b. Stackelberg Duopoly c. Monopolistic Competition d. Cournot Oligopoly
(a) There are two companies in the world that produce large passenger aircraft, Boeing, and Airbus. How would you characterize the market for large passenger aircraft, monopoly, perfectly competitive, monopolistically competitive or Oligopoly? Please explain. Large passenger aircraft are defined as aircraft than can carry more than 150 passengers. (b) The market for telephone services has become more competitive over time with the advancement of technology in the industry. Technology in the aircraft manufacturing industry has also advanced significantly. Why hasn’t this improvement in technology led to an increase in competition (Boeing and Airbus have been the only manufacturers in this industry for many years)? Please explain.