I perfect competitiona fill in the table for the perfectly

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Reference no: EM13373841

I. Perfect Competition
a. Fill in the table for the perfectly competitive firm. Explain how you arrived at each number
b. What is the optimal output, price and profit of the firm?
c. Is the firm in long or only short-run equilibrium? Explain.

Perfectly Competitive Firm								Perfect Competition Market
		total	total
quantity	marginal	variable	fixed	total	marginal	total			Quantity	Quantity
supplied	cost	cost	cost	cost	revenue	revenue	profit	Price	Demand	Supplied
10	$5	$71						$5	16,000	10,000
11		$77						$6	15,000	11,000
12		$84						$7	14,000	12,000
13		$92						$8	13,000	13,000
14		$101						$9	12,000	14,000
15		$111	$12					$10	11,000	15,000


II. Monopoly
a. Fill in the table for the monopoly firm. Explain how you arrived at each number
b. What is the optimal output, price and profit of the firm?
c. Compare and explain the monopoly differences in price, quantity and profit to the PC model in I above.

Monopoly Firm								Monopoly Market
		total	total
quantity	marginal	variable	fixed	total	marginal	total			Quantity
supplied	cost	cost	cost	cost	revenue	revenue	profit	Price	Demand
7,000	$5	$71,000			$8			$14	7,000
8,000		$77,000						$13	8,000
9,000		$84,000						$12	9,000
10,000		$92,000						$11	10,000
11,000		$101,000						$10	11,000
12,000		$111,000	$12,000					$9	12,000

III. Assume that the the market in the problems above is instead imperfectly competitive - let's say monopolistic competition. Please demonstrate your understanding of this market structure by listing an example price and quantity that a firm within the industry would set. Explain your answer. (Hint: Perfect competition and monopoly are boundaries for which imperfect competition exists between.)

Reference no: EM13373841

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