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Monopolistic competition economics Assignment

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Added on  2019-12-28

Monopolistic competition economics Assignment

   Added on 2019-12-28

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ECONOMICS
Monopolistic competition economics Assignment_1
TABLE OF CONTENTSCharacteristics of the monopoly market......................................................................................3Price and quantity sell decision...................................................................................................3Economic profit in short run........................................................................................................3Economic profit in long run.........................................................................................................45 Efficiency of water supply and perfectly competitive industry................................................46 Water supply industry for new firms........................................................................................5Second part......................................................................................................................................51Characterisitcs of the monopolistic industry.............................................................................52 Determination of price and quantity sold.................................................................................53Economic profit in short run......................................................................................................54 Economic profit in long run......................................................................................................65 Economic efficiency of monopolistic and perfect competition................................................76 Issues of café coffee industry...................................................................................................7REFERENCES................................................................................................................................8
Monopolistic competition economics Assignment_2
Characteristics of the monopoly marketOnly one seller: In the monopoly market always one seller exist in the market. In UKsupermarket industry there are multiple players (Bagdikian, 2014). Due to this reasonsupermarket cannot be included in the monopoly market.Super normal profit: Firms operating in monopoly earn super normal profit in theirbusiness. UK supermarkets are running in loss or earn low profit in business. Thus,supermarkets are not in monopoly market.Price and quantity sell decision Firms that are in monopoly market charge a price on product at their own discretion.Quantity sell is determined by considering market demand. National grid is privately owned butregulated by government in order to protect customer’s interest (Merhav, 2013). Tesco comes incategory of private monopoly because in UK it is assumed that firm if have more than 25% sharein industry is in monopoly.Economic profit in short runFirm in the monopoly market earn economic profit because it is only player in the marketwhich can offer relevant product to the customers.Figure 1Economic profit in short run(Source: Carey, Mitchell and Lowe, 2013)Chart revealed that average revenue is greater than average cost which reflects that firmsearn supernormal profit in the business (Carey, Mitchell and Lowe, 2013). In case of private
Monopolistic competition economics Assignment_3

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