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In a global market, where U.S. firms compete with firms from other countries, would this policy make the same sense as it might in a purely domestic context?
ALCOA does not have the monopoly power it once had. How do you suppose their barriers to entry were weakened?
How does the quantity produced and price charged by a monopolist compare to that of a perfectly competitive firm?
When a monopolist identifies its profit-maximizing quantity of output, how does it decide what price to charge?
How can a monopolist identify the profit maximizing level of output if it knows its marginal revenue and marginal costs?
How can a monopolist identify the profit maximizing level of output if it knows its total revenue and total cost curves?
How does the demand curve perceived by a monopolist compare with the market demand curve?
How is the demand curve perceived by a perfectly competitive firm different from the demand curve perceived by a monopolist?
Imagine a monopolist could charge a different price to every customer based on how much he or she were willing to pay. How would this affect monopoly profits?
Suppose demand for a monopoly's product falls so that its profit-maximizing price is below average variable cost. How much output should the firm supply?
If the firms in a monopolistically competitive market are earning economic profits or losses. Would you expect them to continue doing so in the long run? Why?
Perfectly competitive firm Doggies Paradise Inc. sells winter coats for dogs. Dog coats sell for $72 each. What is the profit maximizing quantity?
The AAA Aquarium Co. sells aquariums for $20 each. Fixed costs of production are $20. What is the profit-maximizing quantity of output?
How would an improvement in technology, like the high-efficiency gas turbines or Pirelli tire plant, affect the long-run average cost curve of a firm?
A firm is considering an investment that will earn a 6% rate of return. Should the firm make the investment? Show your work.
Compute the average total cost, average variable cost, and marginal cost of producing 60 and 72 haircuts.
If hiring labor for the winter costs $100/unit and a unit of capital costs $400, what production method should be chosen?
If you sell a product in a perfectly competitive market, but you are not happy with its price, would you raise the price, even by a cent?
Explain in words why a profit-maximizing firm will not choose to produce at a quantity where marginal cost exceeds marginal revenue.
A firm's marginal cost curve above the average variable cost curve is equal. What happens to the firm's individual supply curve if marginal costs increase?
If new technology in a perfectly competitive market brings about a substantial reduction in costs of production, how will this affect the market?
A market in perfect competition is in long-run equilibrium. What happens to the market if labor unions are able to increase wages for workers?
These are the two reasons why we call them perfect. How would you use these two concepts to analyze other market structures and label them imperfect?
Explain how the profit-maximizing rule of setting P = MC leads a perfectly competitive market to be allocatively efficient.
A single firm in a perfectly competitive market is relatively small compared to the rest of the market. What does this mean? How small is small?