Conditions of a perfectly competitive industry

Assignment Help Managerial Economics

Reference no: EM13757044

Topic 1

Describe an industry that would meet the conditions of a perfectly competitive industry:

1. There are many buyers and sellers so neither side of the market has market power.

2. The product provided to the market is identical across suppliers.

3. There are no barriers to entry.

How do individual firms in a perfectly competitive industry respond to an increase in the market demand for the product? Would advertising by individual firms in this type of market provide any benefits?

Topic 2

In order to maximize profits, monopolies produce where: MARGINAL REVENUE = MARGINAL COST < MARKET PRICE. How does this compare to the profit maximization condition for perfectly competitive markets, and how do these differences contribute to deadweight loss in a monopoly market? Can you think of reasons why a monopoly might decide on their own to increase production and lower prices to earn an acceptable profit rather than maximize profits?

Reference no: EM13757044

Questions Cloud

Which was not a factor that lead to seperation from church : Which was not a factor that lead to seperation from the church of england?

What common issues did socrates plato and aristotle study : What common issues did Socrates, Plato and Aristotle study?

Issues that a company may face as it experiences growth : Write a paper of 500-1,000 words (double-spaced) Briefly explain some of the issues that a company may face as it experiences growth and begins to address the proper use of its information systems

What reasons vietnam war had such a great impact on nation : What were the reasons Vietnam War had such a great impact on the nation? How did it contribute to America being a "restless giant"

Conditions of a perfectly competitive industry : Can you think of reasons why a monopoly might decide on their own to increase production and lower prices to earn an acceptable profit rather than maximize profits?

Computers and word processing applications : Provide at least three (3) concerns that you believe the group would have about using computers and word processing applications

Key action that senior health care leadership could take : Suggest a key action that senior health care leadership could take in the community in which you live to push the boundaries of information technology management. Next, speculate on the effect to the community as a result of the improvement to the..

Market for a differentiated product : Which of the following is most likely to be an implicit cost for Company X - An industry comprised of 40 firms, none of which has more than 3% of the total market for a differentiated product is an example of

What phrase to have an axe to grind have to do with history : What does the phrase ' to have an axe to grind' have to do with the construction of history? describe another event that was widely accepted as historical truth, despite a lack of evidence?

User Account

All Pages