Micro Economics For Today
10th Edition
ISBN: 9781337613064
Author: Tucker, Irvin B.
Publisher: Cengage,
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Question
Chapter P3, Problem 2KC
To determine
The condition of the firm in the market.
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Students have asked these similar questions
Compare the long-run equilibrium position of a perfectly competitive firm and a monopolist.Illustrate your answer with the aid of diagrams.
Assume that the firm in the short run is earning super normal profit. Explain what will happen to these profits in long run for the following markets
a) Monopolistic competition b) monopoly
The major difference between a monopolistic competition and monopoly is,
a.
monopoly is a price taker and a firm in monopolistic competition is a price maker.
b.
there are barriers to entry and exit in monopolistic competition and freedom to enter and exit in monopoly.
c.
only a monopoly can earn an abnormal profit in the long run.
d.
None of these.
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- We now assume the firm producing a steel bar is under monopolistic competition. When the price of the steel bar is $ 30,000, the quantity demanded is 8 metric tons, a 100% change in the price would change the quantity demanded by 25%. The firms fixed cost is $45,000. Its variable cost in thousands at each level of production are 45, 85, 120, 150, 185, 225, 270, 325, 390, and 465. 1. At what production output should the firm produce in the long run? 2. At what price should the firm sell its product in the long run?arrow_forwardif a monopolistic firm takes over a perfectly competitive market we would expect to see the market price of the good to? fall because demand is perfectly elastic rise and quantity sold to fall fall as the monopolist tries to increase sales rise and quantity sold to increasearrow_forwardexplain pure competition monopoly and monopolistic competition under. A. Economic Profit B. Normal Profit C. Minimum Profit D. Maximum Profitarrow_forward
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