evaluate the following statement:“Managers should specialize by acquiring only the tools needed to operate in a particular market structure. That is, man- agers should specialize in managing either a perfectly competitive, monopoly, monopolistically competitive, or oligopoly firm.”
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evaluate the following statement:“Managers should specialize by acquiring only the tools needed to operate in a particular market structure. That is, man- agers should specialize in managing either a perfectly
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- Briefly state the basic characteristics of pure competition, pure monopoly, monopolistic competition, and oligopoly. Under which of these market classifications does each of the following most accurately fit? (a) a supermarket in your hometown; (b) the steel industry; (c) a Kansas wheat farm; (d) the commercial bank in which you or your family has an account; (e) the automobile industry. In each case, justify your classification.Evaluate the following statement: “Managers should specialize by acquiring only the tools needed to operate in a particular market structure. That is, managers should specialize in managing either a perfectly competitive, monopoly, monopolistically competitive, or oligopoly firm.”Firms compete in different types of market structures. In the real world, most markets are either monopolistically competitive or oligopolistic, and a few markets have a monopoly. Note that perfect competition is rare because no market has all the characteristics of a perfectly competitive market as described by the theory of perfect competition. Explain which firm is likely to face a more elastic demand curve: a monopoly or a pizza shop?
- The figure below shows the demand (D, MR) and cost (MC, ATC) curves for six oligopolies in the chewing gum industry. Assume that all 6 firms have the same identical cost curves. Demand and cost conditions for the Chewing Gum Industry $4 Dollars .40 .35 .25 MC MR a. 12,000; $.40 b. 14,000; $.30 c. 16,000; $.35 d. 12,000; $.25 ATC D 0 12 14 16 Packs of chewing gum in thousands Suppose the six firms that produce chewing gum form a cartel. The cartel faces the market demand curve given by D in the figure above. To maximize profits, the cartel should produce packs of chewing gum and the price should beBriefly state the basic characteristics of pure competition, pure monopoly, monopolistic competition, and oligopoly. Under which of these market classififications does each of the following most accurately fifit? (a ) a supermarket in your hometown; (b) the steel industry; (c) a Kansas wheat farm; (d) the commercial bank in which you or your family has an account; (e) the automobile industry. In each case justify your classification.encient? Suppose that a company operates in the monopolistically competitive market for electric razors. The following graph shows the demand curve, marginal revenue (MR) curve, marginal cost (MC) curve, and average total cost (ATC) curve for the firm. Place a black point (plus symbol) on the graph to indicate the long-run monopolistically competitive equilibrium price and quantity for this firm. Next, place a grey point (star symbol) to indicate the minimum average total cost the firm faces and the quantity associated with that cost. 3; 100 50 90 80 88 + 70 70 60 550 40 PRICE (Dollars per razor) 30 30 10 MC 20 20 0 10 10 ATC +. ? Mon Comp Outcome MR Demand 20 30 40 50 60 70 80 90 100 QUANTITY (Thousands of razors) Min Unit Cost
- Please provide examples of firms that belong to industries that are perfectly competitive, monopolistically competitive, duopolistic, oligopolistic or just pure monopolies. Explain the industry setup by providing examples of other firms (numbers) or market concentration statistics, some description of the product (is it standard, slightly differentiated, highly differentiated, or a crucial input that one firm has control of), and the nature of barriers to entry or exit in the industry (are they non-existent or significant, and what kinds of barriers these are).The figure below shows the demand (D, MR) and cost (MC, ATC) curves for six oligopolies in the chewing gum industry. Assume that all 6 firms have the same identical cost curves. Demand and cost conditions for the Chewing Gum Industry .40 .35 .31 8.30 .25 Dollars MC MR ATC D 0 12 14 16 Packs of chewing gum in thousands Suppose you're hired by the Department of Justice Anti-Trust Division to analyze the chewing gum industry. You conclude that if the industry were perfectly competitive, the short-run equilibrium output and price would be: a. 14,000 packs of chewing gum at a price of $0.30 per pack b. 16,000 packs of chewing gum at a price of $0.35 per pack C. indeterminate output levels from this information. d. 12,000 packs of chewing gum at a price of $0.40 per packComplete the following table by indicating key characteristics of each market structure. Market Structure Number of Firms Type of Product Entry Control of Price Monopoly Oligopoly Monopolistic Competition Perfect Competition For each of the following scenarios, determine which market structure best describes the scenario. Scenario Market Model Dozens of plain white socks producers use a widely known and readily available technology. Scholastic Inc. is the only company with the U.S. copyright to a popular series of books. Many small shops sell different styles of sweaters. Sweaters vary by price and quality. Four Internet providers offer similar services. Any new company would have to engage in a price war with the existing companies.
- Firms like Papa John’s, Domino’s, and Pizza Hut sell pizza and other products that are differentiated in nature. While numerous pizza chains exist in most locations, the differentiated nature of these firms’ products permits them to charge prices above marginal cost. Use the causal view of structure, conduct, and performance to explain the role of differentiation in the monopolistically competitive market for pizza. Then apply the feedback critique to the role of differentiation in the industry.Describe an oligopolistic market structure. What alternatives to price competition exist in such markets? Why would these alternatives be important to shippers?Compare and contrast how prices are determined under pure competition, monopoly, oligopoly and monopolistic competitive markets.
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