One is a perfectly competitive firm and the other is

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: hort-run economic profits. One is a perfectly competitive firm and the other is a monopoly. (a) For each firm, draw a correctly labeled graph showing the following. (i) Price (ii) Quantity of output (iii) Area of economic profits (b) For each firm, explain the relationship between price and marginal revenue. (c) For each firm, explain how the economic profits would most likely change in the long run. (d) Label the area that represents the deadweight loss on the graph for the monopoly firm drawn in (a). Explain what this deadweight loss represents. Copyright © 2003 by College Entrance Examination Board. All rights reserved. Available to AP professionals at and to students and parents at GO ON TO THE NEXT PAGE. 2 2003 AP® MICROECONOMICS FREE-RESPONSE QUESTIONS (Form B) 2. The diagram above illustrates the domestic market for grain in Country X before and after international trade. The letters inside the diagram represent areas, not points. (a) Using the labeling of the graph, identify each of the followin...
View Full Document

This note was uploaded on 02/03/2014 for the course ECONOMIC 112 taught by Professor Van le during the Fall '12 term at American Internation College.

Ask a homework question - tutors are online