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Microeconomics: Market Structures and Firm Behavior

   

Added on  2020-05-16

10 Pages1692 Words362 Views
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Running head: MICROECONOMICSMicroeconomicsName of the studentName of the UniversityAuthor note
Microeconomics: Market Structures and Firm Behavior_1

1MICROECONOMICSTable of ContentsQuestion 1:.......................................................................................................................................2Question 2:.......................................................................................................................................2Question 3:.......................................................................................................................................2Question 4:.......................................................................................................................................2Question 5:.......................................................................................................................................2Question 6:.......................................................................................................................................2Question 7:.......................................................................................................................................2Question 8:.......................................................................................................................................2Question 9:.......................................................................................................................................2Question 10:.....................................................................................................................................3
Microeconomics: Market Structures and Firm Behavior_2

2MICROECONOMICSQuestion 1:Monopoly is known as the market situation, where a single firm is the producer of aproduct leading to complete control over the market and that firm serves large number of buyers.A monopoly firm is considered as the price maker due to its complete control over the supply ofgoods and services (Zeuthen 2018). Products produced by a monopoly producer do not have anysubstitute and due to their ability to control market, they produce less and charge higher price.Part A of Figure 1, showcase the monopoly market situation, where it produces Qm amount ofoutput and sells it at Pm price. Monopolistic competition is one of the imperfect market situations, where manyproducers sell highly differentiated products; however, they are not perfect substitute. Thenumber of buyers in this market scenario is large and number of sellers is moderate; higher thanthe monopoly market but lower than the perfect competition (Nikaido 2015). Market power inthe case of monopolistic competition is lower and market supply is subject to competition. Part Bof Figure 1, depicts the monopolistically competitive market condition, where price is Pl andquantity is Ql.
Microeconomics: Market Structures and Firm Behavior_3

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