6. Assume that a pure monopolist and a purely competitive firm have the same unit costs.Contrast the two with respect to (a) price, (b) output, (c) profits, Page 201(d) allocation ofresources, and (e) impact on the distribution of income. Since both monopolists and competitivefirms follow the MR = MC rule in maximizing profits, how do you account for the different results?Why might the costs of a purely competitive firm and those of a monopolist be different? Whatare the implications of such a cost difference? LO3 Show Get answer to your question and much more 3.Problem 1 p201“No firm is completely sheltered from rivals; all firms compete for consumer dollars. If that is so, Get answer to your question and much more 4.Questions 6 p2286.Explain the general meaning of the following profit payoff matrix for oligopolists X and Y. All profitfigures are in thousands. LO4
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This is the end of the test. When you have completed all the questions and reviewed your answers, press the button below to grade the test. Why might the costs of a purely competitive firm and those of a monopolist be different?The monopolist must equate MR and MC. Having determined at what quantity this equality occurs, the monopolist simultaneously sets price. This price differs at each output because the demand curve is downsloping. The pure competitor accepts the price given by total industry supply and demand.
Are monopoly and pure competition the same?In a monopolistic market, there is only one firm that dictates the price and supply levels of goods and services. A perfectly competitive market is composed of many firms, where no one firm has market control. In the real world, no market is purely monopolistic or perfectly competitive.
What is the difference between purely competitive and pure monopolist output at the industry level?Answer: With the same costs, the pure monopolist will charge a higher price, have a smaller output, and have higher economic profits in both the short run and the long run than the pure competitor.
Is a pure monopolist demand curve perfectly inelastic?Why is the pure monopolist's demand curve not perfectly inelastic? The demand curve facing a pure monopolist is downward sloping; that facing the purely competitive firm is horizontal, perfectly elastic.
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