Check each of the following that may exist in oligopolies and monopolistic competition when compared to...

Check each of the following that may exist in oligopolies and monopolistic competition when compared to pure competition.

A.increased efficiency

B. higher costs

C. less efficiency

D.more output than pure competition

E. lower output than pure competition

F.lower costs to consumers

Solutions

Expert Solution

Ans) Perfectly competitive market is where there are many sellers selling homogeneous products. Sellers are price takers.

Monopolistic competition is where there are many sellers selling homogeneous but differentiated products.

Oligopoly is when there are few large firms which dominate the market.

Both oligopoly and monopolistic competition produce less output than pure competition and charge higher prices.

Further, both oligopoly and monopolistic competition are inefficient while pure competition is efficient. It is because pure competition charges price equal to marginal cost and produces socially optimal quantity. While both oligopoly and monopolistic competition produce less quantity and charge a price higher than marginal cost leading to inefficiency.

Rahul Sunny answered 2 months ago

Next > < Previous

Related Solutions

Check each of the following that may exist in oligopolies and monopolistic competition when compared to...

Check each of the following that may exist in oligopolies and monopolistic competition when compared to pure competition. increased efficiency higher costs less efficiency more output than pure competition lower output than pure competition lower costs to consumers

Discuss and explain at least 250 words Monopoly Vs Perfect Competition and Oligopolies and Monopolistic Competition

Many product markets exhibit characteristics of both monopolistic competition and oligopolies, such as video game consoles...

Many product markets exhibit characteristics of both monopolistic competition and oligopolies, such as video game consoles and movie theater chains. What characteristics in each of these markets make it more monopolistically competitive? Which characteristics make it more like an oligopoly? a. Elastic demand with differentiated products. b. Differentiated products with mutual interdependence. c. Single seller of a good or service and collusive agreement. d. Large number of sellers with homogenous products.

Check all the following that are true. Oligopolies have a perfectly elastic demand curve Oligopolies have...

Check all the following that are true. Oligopolies have a perfectly elastic demand curve Oligopolies have an elastic demand above the prevailing price Oligopolies have an inelastic demand below the prevailing price the prevailing oligopoly price is at the intersection of the elastic and inelastic portions of the kinked demand curve Check all the following that lead to cost inefficiencies in monopoly. operating inefficiency costs of government regulation rent-seeking behavior competition with other firms income concentration charging at the lowest...

Contrast perfect competition with monopolies and monopolistic competition, providing an example of each.

Explain the Assumptions of Competition and Monopolistic Competition. Give an example of each form of market...

Explain the Assumptions of Competition and Monopolistic Competition. Give an example of each form of market structure. Explain the pricing decisions of Competition and Monopolistic Competition. What long run profits are expected at each firm? Explain

1. Three market structures: perfect competition, monopoly, and monopolistic competition. – In each of these, would...

1. Three market structures: perfect competition, monopoly, and monopolistic competition. – In each of these, would you expect to see firms spending money to advertise their products? Why or why not? 2. Is advertising good or bad from society’s viewpoint? Try to think of at least one “pro” and “con.

Answer the following questions comparing monopolistic competition to perfect competition. a. In the long run, how...

Answer the following questions comparing monopolistic competition to perfect competition. a. In the long run, how does the profit earned by a firm operating in a monopolistically competitive market compare to the profit the same firm would earn if it were instead operating in a perfectly competitive market? Please explain. b. In the long run, how does the average cost of production for a firm operating in a monopolistically competitive market compare to the average cost of production for the...

There are four market models: perfect competition, monopolistic competition, oligopoly and monopoly. Briefly discuss the assumptions of each...

There are four market models: perfect competition, monopolistic competition, oligopoly and monopoly. Briefly discuss the assumptions of each of these four models and give examples of each. Explain the long run economic profit earned by each of the four. Explain how the concept of economic profit might help explain the rationale for the government’s granting of monopolies to those firms that protect their product with a patent.

1)In monopolistic competition, profit is maximized when the amount produced is such that A. marginal revenue...

1)In monopolistic competition, profit is maximized when the amount produced is such that A. marginal revenue is greater than marginal cost. B. marginal revenue equals marginal cost. C. total revenue is maximized. D. total revenue equals total cost. 2)Dole Co. operates in a monopolistically competitive market. To try to earn an economic profit, Dole Co. will A. increase output. B. prevent other firms from entering the market. C. continually seek to differentiate its product. D. increase its product's price. 3)...

Subjects