Question

If you had your choice, would you rather sell a product over which you had a monopoly or a product that was close to perfectly competitive? Explain your answer posing the different questions you’d have to ask about the monopoly and product you are selling.

Answer 1

Answer - I would sell the product in monopoly and not in the competitive market. This is because there will be no competition in monopoly , the positive economic profits could be earned by charging more price from the consumers. On the other hand , the positive profits could not be earned in competitive market and also there is high level of competition in this market . But for this , the product I am selling should not have the substitutes. If the product will have number of substitutes , it will have to be sold in competitive market.