Compare perfectly competitive markets, monopoly markets, and oligopoly markets o

Question

Compare perfectly competitive markets, monopoly markets, and oligopoly markets on the following economic behavior by indicting in which market structure the behavior is true: Producers maximize profit by producing where MR MC in perfecty competitive markets only The efficient outcome is to produce where P MC in perfectly competitive markets The efficient outcome is achieved in perfectly competitive markets ony Market price is greater than marginal revenue (MR) in monopoly markets only Some form of barriers to entry exist in C on poly lig poly arketsO ty If they collude, oligopolies will produce at the same level at (Cick to seleco markets and both perfectly competitive firms and monopolies perfectly competitive firms monopolies

Explanation / Answer

a. Monopoly and oligopoly markets only.

The profit maximising level of output under monopoly and oligopoly is at a point where the marginal revenue equals the marginal cost.

b. Perfectly competitive market.

This is so because the sellers are selling homogeneous good so marginal cost pricing is automatically attained.

c. Perfect competition.

Because marginal cost pricing is adhered to for charging for goods and services.

d. Monopoly.

This is so because in order to sell more units, a monopolist needs to reduce its price as it faces a downward sloping demand curve.

e. Monopoly and oligopoly.

Monopoly is a market structure where only one firm exists. Oligopoly is a structure where few firms exists. there are entry and exit barriers.

f. Monopoly.

If the few firms in the existing market collude, they would become one single entity and behave like a monopolist.

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.