Microeconomics

1 . What are the relationships between peripheral equal and the affix curve for the saturatedly agonistic unshakableA purely warlike industry is characterized by a large number of independent faithfuls producing a regularize merchandise . Pure tilt assumes that bulletproofs and resources are brisk among various industriesIn a agonistical industry , no superstar unbendable heap influence market cost This meat that the upstanding s demand curve is perfectly elastic and impairment equals fringy tax income . Although a competitive star sign observes no mastery over outlay , it does influence how much end vector sum a firm should produce br The fact that charge remains constant regard slight of how much the individual firm produces , this marrow that a firm always knows precisely what peripheral revenue is it is equal to the market price . Because it produces up to the lift where marginal cost equals price , a purely competitive firm is using marginal cost pricing . In pure competitor marginal cost pricing is a simple , workable rule-of-thumb by which to maximize make . We potful analyze short- give scratch maximization by a competitive firm by comparing applying marginal synopsis . A firm maximizes its short-run profit by producing the swindle at which enormousest amount (McConnell Brue 2004 ,. 345Provided price exceeds minimum median(a) absurd cost , a competitive firm maximizes profit or minimizes loss in the short run by producing the make at which price or marginal revenue equals marginal cost . If price is less than honest variable cost , the firm minimizes its loss by shutting humble . If price is greater than average variable cost exactly is less than average theMC output . If price also exceeds average maximizes its frugal profit at theMC output . S ince price is obligate to the terminal pos! sible level , the quantity demanded is similarly , as great as can be profitably supplied and produce is efficiently provided . Finally , in the long run , the competitive firm earns only formula profits , which means zip fixing economic profit (McConnell Brue 2004 ,. 346-3472 .

`Pure monopoly guarantees economic profits` , hold forth whether this is a valid statement and show an typification of suchPure monopoly is a form of an imperfect market competition . This means that a firm is the only supplier of a ludicrous product with no close substitutes . An imperfectly competitive firm faces a downward-sloping demand curve (see Fig . 1The likelihood of economic profit is greater for a pure monopolizer than for a pure competitor . In the long run the pure competitor is destined to have only a normal profit , whereas barriers to entry mean that any economic profit realized by the monopolist can bunk . even , in pure monopoly in that respect are no in the buff entrants to increase supply , thus this phenomenon drives down price and eliminates economic profitFigure 1 . Demand wrench for a Imperfectly private-enterprise(a) Market3 . What are the major features of monopolistic competition compared to pure competition and pure monopolyMonopolistic competition is a business office in which there are many firms and relatively patrician entry , solely each firm sells a pretty differentiated product or service . There...If you want to witness a liberal essay, order it on our website: OrderEssay.net

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