Question

If the marginal cost is 6, the price is 14 and the quantity produced is 8...

If the marginal cost is 6, the price is 14 and the quantity produced is 8 what is the value of the monopoly rent?

What is the relationship between the price for monopoly, Oligopoly, a PC firm?

What is the relationship between the quantity for monopoly, Oligopoly, a PC firm?

Name a company that is perfectly competitive, oligopoly, monopoly, monopolistic competition

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Homework Answers

Answer #1

Monopoly rent is the area of profit that can be used in lobbying the government or in preventing competition.

Rent = (P - MC)*Q = (14 - 6)*8 = $64

We see that Pmonopoly > Poligopoly > Pcompetition. This is because competition tends to decreases from perfectly competitive markets to monopoly so market power to charge a high price increases

For the same reason, Qcompetition >Qoligopoly > Qmonopoly

Here, perfectly competitive = farming or agricultual farms, oligopoly - soft drinks market such as Pepsi, monopoly - such as US postal service, monopolistic competition as Phillips

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