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Classify the following markets as perfectly competitive monopolistic or monopolistically competitive and explain your answers 1 Wooden pencils 2 copper 3 local telephone service?
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Why is it that firms can earn profits in the long run in monopoly and oligopoly but not in monopolistic competition and perfect competition?
Because monopolistically competitive firms have an optimal production allocation at monopoly values: marginal revenue = marginal cost, marking-up to the demand function. When competition is not perfect, marginal revenue does not equal demand but is always below it on a Cartesian plane, so the optimal production value of a monopolistically competitive firm is both less and at a higher price than a perfectly competitive one.
Does monopolistically competitive firms have horizontal marginal cost curve?
No it does not. Only Perfectly Competitive firms have a horizontal Marginal Cost curve, which is also there demand curve.
One difference between a perfectly competitive firm and a monopoly is that a perfectly competitive firm produces where?
perfectly competitive industry become a monopoly， what changes
Can a perfectly competitive firm set a price for its products that is above marginal cost?
A perfectly competitive firm would set its prices at a perfectly competitive price.
Is service and quality likely to be better in an industry dominated by a monopoly or in a perfectly competitive industryWhy?
in a perfectly competitive industry
Why is it that firms can earn profits in the long run in monopoly and oligopoly but not in monopolistic competition and perfect competition?
Because monopolistically competitive firms have an optimal production allocation at monopoly values: marginal revenue = marginal cost, marking-up to the demand function. When competition is not perfect, marginal revenue does not equal demand but is always below it on a Cartesian plane, so the optimal production value of a monopolistically competitive firm is both less and at a higher price than a perfectly competitive one.
Does monopolistically competitive firms have horizontal marginal cost curve?
No it does not. Only Perfectly Competitive firms have a horizontal Marginal Cost curve, which is also there demand curve.
Bob and john are oligopolists in the market for ice cream. If Bob and John engage in a price war will the price of ice cream in their town be closer to Perfectly competitive market or a monopolistic?
Perfectly competitive, because both firms will compete to earn a greater market share (they are "price takers"), leading to prices that more closely resemble a perfectly competitive market than a monopolistic market (one dominant "price making" firm).
Which of the following could not prevent a market from becoming perfectly competitive?
excessive information
One difference between a perfectly competitive firm and a monopoly is that a perfectly competitive firm produces where -?
perfectly competitive industry become a monopoly， what changes
One difference between a perfectly competitive firm and a monopoly is that a perfectly competitive firm produces where?
perfectly competitive industry become a monopoly， what changes
Can a perfectly competitive firm set a price for its products that is above marginal cost?
A perfectly competitive firm would set its prices at a perfectly competitive price.
Does refractive surgery meet the characteristics of a perfectly competitive market?
I think that no medical practise can be tagged as a perfectly competitive market. In issues of health, we do not have perfect information about the best alternatives to consume (different surgeons), and that is one of the key requirements of perfect competition. Moreover, due to the reduced number of surgeons, they are able to control prices, being nearer to a framework of monopolistic competition.
Do perfectly competitive firms advertise?
Perfectly competitive firms would not advertise as advertising would serve no purpose. A market that is perfectly competitive exists only in theory.
Is service and quality likely to be better in an industry dominated by a monopoly or in a perfectly competitive industryWhy?
in a perfectly competitive industry
What is monopolistic competition and perfect competition?
Three conditions characterize a monopolistic & Perfectly competitive market. First, the market has many firms, none of which is large. Second, there is free entry and exit into the market; there are no barriers to entry or exit. Third, each firm in the market produces a differentiated product. This last condition is what distinguishes monopolistic competition from perfect competition. In perfect competition in addition to the prior two characteristics the firms produces similar products.
What are two perfectly competitive firms?
None
