Why in a perfectly competitive market seller cannot sell at a price higher than the market price? Explain by giving at least two justifications а. If the price received by a perfectly competitive firm is less than its average variable cost (AVC), will the firm temporarily shut down or not? Why? b. C. List one assumption of each market structure • Perfectly competitive market, • Monopoly Oligopoly Monopolistic competition

Why in a perfectly competitive market seller cannot sell at a price higher than the market price? Explain by giving at least two justifications а. If the price received by a perfectly competitive firm is less than its average variable cost (AVC), will the firm temporarily shut down or not? Why? b. C. List one assumption of each market structure • Perfectly competitive market, • Monopoly Oligopoly Monopolistic competition

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter10: Monopolistic Competition And Oligopoly

Section: Chapter Questions

Problem 11PAE

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?
If the firms in a monopolistically competitive market are earning economic profits or losses in the short run, would you expect them to continue doing so in the long run? Why?
Make a case for why monopolistically competitive industries never reach long-run equilibrium.
A perfectly competitive firm is onsidered to be more generous in terms of price and quantity of output in comparison to firm belonged to monopoly and monopolistic markets. C. If firms incurring loss in this market begin to exit the market, what will happen to the market equilibrium? Demonstrate your answer using a simplified graph. d. The firm wishes to supply output more than the quantity determined under the equilibrium condition, is it worth to pursue?