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Final Exam Questions

Final Exam Questions - o The KINK in the graph(3 questions...

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Final Exam Questions What are difference characteristics of a monopoly (different language) o Price maker o Demand curve for individual monopoly o Profit maximization MC=MR not in oligopoly Monopoly o What is Marginal Revenue? o In monopoly: In monopoly the market is closed. Price discrimination: monopoly charging two or more prices for same commodity at the same time but at different locations. o To make profit o Elasticity of demand What makes monopoly powerful? o Economies of scale: When MC interests with MR the quantity is determined. (4 questions) o Total revenue: Q1 x P2 = 40 X 50 = 2000 Monopoly (17 questions) Oligopoly: a few firms controlling the market o Products are similar with some differentiation. Why oligopolies develop barriers? o Economies of scale: WHAT IS THIS? Graph of oligopoly
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Unformatted text preview: o The KINK in the graph (3 questions) o Discontinuity gap of marginal revenue: o Because MC does not intersect with MR. Prices are sticky (inflexible prices): prices dont change for a long time. There is no profit maximization point in oligopoly unless MC is altered. o What cause discontinuity gap? Because of the kink demand curve. Price and leadership o Perfect collusion: derives from merger (written agreement between corporations) o Imperfect collusion price leaderships Monopolistic Competitions: o Large sellers o Products are differentiated. (major characteristics) o Chemical composition o Service What is the demand curve: o Monopolistic Competitions: downward sloping (an actual exam question) Total revenue: 0 p2 q1...
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