Structure is better for consumers-perfect competition

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Now, assume that a company comes to town and buys the entire sell Coca-Cola, creating a monopoly on Coca-cola. Assume that the cost curves for the new firm are the same as the perfectly competitive firm. in the new market, Coca-cola sells for 10.75, and the monopolist sells 2.5 units.

a) Graph the market

b) is there dead weight loss in this market? if so, show it on the graph

c) calculate the consumer surplus

d) how much profit does the firm earn?

e) which market structure is better for consumers, perfect competition or monopoly? Explain

Reference no: EM13795982

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