Unformatted text preview: ii. What is the market price? iii. What are the proﬁts (or losses) of each ﬁrm? (c) Perfect competition - Long run (harder) i. Would we expect entry into the perfectly competitive market with 6 ﬁrms? Why, or why not? ii. How many competitive ﬁrms can be sustained in this industry in the long run? (Hint: let the number of ﬁrms in the market be n , solve for the competitive equilibrium as before, and think about the long run equilibrium conditions). iii. What about the short run? If there were 10 competitive ﬁrms in the market, what would happen in the short run? What about 100 competitive ﬁrms? (d) Monopoly i. Suppose there is a single ﬁrm operating in the market. How much would the monopolist produce? ii. What is the market price? iii. What are the proﬁts (or losses) of the monopolist?...
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This note was uploaded on 11/02/2010 for the course ECOS 3005 taught by Professor Douglas during the Three '10 term at University of Sydney.
- Three '10