Assignment
A. Describe the difference in a Firm who when operating at their optimal profitability quantity of output is experiencing Loss Minimization vs a Firm who even at their optimal profitability quantity of output should shutdown.
B. Explain the concept of Blocked entry in the Monopolistic and the Oligopolistic market structures.
C. Explain the divergence between marginal revenue and price in the imperfectly competitive markets.
D. Describe the relationship between Marginal Revenue, Marginal Cost, Price, Average Total cost and Average Variable cost at a Firm's optimal level of output if that Firm is realizing economic profit.
E. If the Firm described in question 4 is in a monopolistic market what would be the reaction of the supply to the market given the level of profitability?
F. Describe how at the profit maximizing level of output in the imperfectly competitive markets (Monopoly, Monopolistic Competition and Oligopoly) allows there to exist waste of productive resources (hint: are Firm's within the industries in any of these markets operating at the level of output where their average total cost is minimized?).
G. Explain how either economic profit or loss minimization could be representative of the short-run profitability realized by firms within a monopolistically competitive market, but breakeven or normal profit, represents the definitive long-run profitability that will come to exist for the firms operating in that market.
H. What two markets have long-run breakeven profitability attained by the firms within that market? Although Firms in each of these markets will realize breakeven, what is a distinguishing difference between these Firms earning a normal long-run profit?
I. Explain the basis for the derivation of the kinked demand curve in the Oligopolistic market.
J. Why are productive and allocative efficiencies in the long-run achieved by the firms within the perfectly competitive market, but these efficiencies are not realized in any of the imperfectly competitive markets?