There are several market structures within an economy that affect the decisions of individuals and firms. A) Describe the effect on price and the quantity available in the marketplace for a monopoly market structure. B) Explain one positive effect of a monopoly on individuals and firms. C) Explain one negative effect of a monopoly on individuals and firms.
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- The task to complete is to create a market scenario for a branded handbag. (You can google handbags and come up with hundreds!): Name the company and describe one of its "signature" handbags. - Draw the monopolistic competition market model for that company showing a profit. 1. Do you think that the United State's economic system is best described by a perfectly competitive dynamic or best described by a monopoly dynamic where there are forces that exclude entry into markets or by a monopolistic competition dynamic with some power to exclude entry but mainly a market of differentiation?Suppose, Pfizer Company is the only company allowed by the Sultanate government to sell COVID vaccine in Oman. According to you, what type of market Pfizer Company is having in Oman? a. Monopoly market b. Monopolistic market c. Competitive market d. Oligopoly market17.Which of the following statements about monopolistically competition is CORRECT: A. Earn abnormal profits in the long run. B. Always make profit in the short run because of monopoly power. C. Charge a price equals to minimum average total cost in the long run. D. In the long run, produce at price greater than marginal cost 18.(a) Explain whether each of the following statements applies to microeconomics or macroeconomics: (i) The jobless rate in the housing industry has increased substantially in 2020. (ii) A national car rental company has shut down due to Covid-19. (iii) The inflation rate in Malaysia has decreased by 2% last year. (b) Discuss how a market system and a command economy try to cope with economic scarcity.
- Give an example of a government-created monopoly. Is creating this monopoly necessarily bad public policy? Explain. Define natural monopoly. What does the size of a market have to do with whether an industry is a natural monopoly? Give two examples of price discrimination. In each case, explain why the monopolist chooses to follow this business strategy. What are the three reasons that a market might have a monopoly? Give two examples of monopolies and explain the reason for each.Monopsony Assume a market for crude oil, and let D denote the demand of oil while MC the marginal cost. The inverse demand is p = 100 - 10 q, and the MC is MC = 20 q. a. Use a figure to depict the competitive outcome assuming many producer and many consumers. Derive the competitive equilibrium outcome. b. Use a second figure to explain the monopsony solution assuming a single buyer. Derive the monopsony solution.Why does monopoly arise? How does monopoly make profit and loss? Graphically explain
- Define economic efficiency in terms of production costs and products prices. Why are purely competitive industries and economically efficient and monopoly are not efficient?Monopoly outcome versus perfectly competitive outcome Consider the daily market for hot dogs in a small city. Suppose that this market is in long-run perfectly 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. The following graph shows the demand (D) and supply curves (S = MC) in the market for hot dogs. Place the black point (plus symbol) on the graph to indicate the market price and quantity that will result from perfect competition. Use the green point (triangle symbol) to shade the area that represents consumers’ surplus, and use the purple point (diamond symbol) to shade the area that represents producers’ surplus. (graph 1) Assume that one of the hot dog vendors successfully lobbies the city council to obtain the exclusive right to sell hot dogs within the city limits. This firm buys up all the rest of the hot dog vendors in the city and…Please compare the difference in market equilibrium and its consequence between monopoly and market competition
- Some economies are less healthy than they could be because both the market power and economic profit of some favored firms are protected by either government or some private force (e.g. mafia). Present a firm that has market power and is earning economic profit when it is maximizing profit. Explain how competition could help consumers by showing how the profit maximizing point for this firm might change, to the advantage of consumers, if competitors entered this market and competed against this firm.Give two examples of price discrimination. In each case, explain why the monopolist chooses to follow this business strategy. What are the three reasons that a market might have a monopoly? Give two examples of monopolies and explain the reason for each.Explain why it is not possible for a monopoly firm to maximise its profits by charging a price in the price region where demand is inelastic, even though there are no direct substitutes for its product. Also explain how a monopoly will be able to charge a higher price than a firm producing the good under perfect, oligopolistic, or monopolistic competition