Answer Questions

Answer question:(at least 100 words)

1. Compare the amount of consumers’ surplus received by buyers under a monopoly with the amount received under perfect competition.

2. State the three assumptions common to the different theories of oligopoly.

Comment:(at least 50 words)

#1: State three basic assumptions of monopoly.

The first assumption is that there is one seller. In effect, the firm is the industry. Contrast this situation with perfect competition, where many firms make up the industry. The second assumption is that the single seller sells a product that has no close substitutes. Because there are no close substitutes for its product, the single seller–the monopolist or monopoly firm –faces little, if any, competition. The third assumption is that the barriers to entry are extremely high. In the theory of perfect competition, a firm can enter the industry easily. IN the theory of monopoly, entering the industry is very hard (if not impossible). Extremely high barriers keep our new firms.

#2: Explain why the monopolistic competitor’s demand and marginal revenue curves are not the same.

 Unlike the perfectly competitive firm, whose demand curve is the same as the marginal revenue curve, the monopolistic competitor’s demand curve is not horizontal; it is downward sloping. This is because the monopolistic competitor’s rivals do not sell exactly the same product that the monopolistic competitor sells. Because its product has substitutes, but not perfect ones, the elasticity of demand for the monopolistic competitor’s product is not as great as that of the perfectly competitive firm. For the monopolistic competitor P > MR, while for the perfectly competitive firm P = MR.

Order a unique copy of this paper
(550 words)

Approximate price: $22

Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency