Theory of market structures

Reference no: EM1315019

Answer each of the questions below. Provide a brief explanation to support your answer.

a. Which type of firm faces the most elastic demand curve?

b. In which of market structures are firms able to earn both accounting and economic profits in the long run?

c. Why are firms in (perfectly) competitive markets assumed to be more efficient than firms in other market structures?

d. In what market structure is the firm's demand curve the same as the industry demand curve?

e. Why do monopolistically competitive firms end up with zero economic profit in the long run even if price is above marginal cost?

Reference no: EM1315019

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