ECON 101 Chapter 9: Competitive Markets
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Ch 9 - Competitive Markets
June 11, 2018
4:59 PM
Econ 101 Page 1
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Related Questions
Suppose that a firm in a competitive market faces the following revenues and costs:
Quantity | Total Revenue | Total Cost |
0 | $0 | $3 |
1 | $7 | $5 |
2 | $14 | $9 |
3 | $21 | $15 |
4 | $28 | $23 |
5 | $35 | $33 |
6 | $42 | $45 |
7 | $49 | $59 |
At which level of production will the firm maximize profit?
3 units
4 units
5 units
6 units
Consider the following market demand schedule and total costs for a monopoly.
Q | P | TR | TC | MR | MC | Profit | ||||||||||||||||||||
0 | 45 | 4 | ||||||||||||||||||||||||
1 | 40 | 9 | ||||||||||||||||||||||||
2 | 35 | 19 | ||||||||||||||||||||||||
3 | 30 | 39 | ||||||||||||||||||||||||
4 | 25 | 61 | ||||||||||||||||||||||||
5 | 20 | 91 | ||||||||||||||||||||||||
6 | 15 | 130 | ||||||||||||||||||||||||
7 | 10 | 172 |
a) Fill in the blanks.
b) How is the relationship between price and MR different between monopolistic and perfectly competitive markets?
c) Would the demand curve facing a monopolistic competitive market be more or less elastic than the demand curve facing a monopolist, why? Do firms in a monopolistically competitive market make long-run economic profits, why or why not?