From the perspective of a manufacturer (producing a product of your choice) oper
ID: 1165316 • Letter: F
Question
From the perspective of a manufacturer (producing a product of your choice) operating with the goal of maximizing revenues and profits, outline strategies for succeeding at this goal under each of the four market forms: Perfect Competition, Monopolistic Competition, Oligopoly, and Monopoly. Be sure to be clear on the reasons for differences in strategies. Include also a discussion of: A) Which market form would benefit you the producer the most and B) Which market form would benefit consumers the most.
Explanation / Answer
Profit is always maximised when MR=MC. Thus producer will always produce at a pount where MR=MC.
B)In perfectly competitive market P=MR=Mc and P=min of ATC in perfectly competitive market. Thus consumer gets maximum benefit. Thus consumer surplus is maximised when market is perfectly competitive market.
A) producer surplus is maximised or producer profit is maximised when market is monopoly.
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