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Comparing a monopoly, compared to a fully competitive market, what are the differences in       a....

Comparing a monopoly, compared to a fully competitive market, what are the differences in

      a. Gross Revenue

      b. Economic Profits

      c. Supply (Output)

      d. Consumer Surplus

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Answer #1

Answer
a)
the gross revenue is higher in the perfectly competitive market than monopoly
because the output is high and the price is almost unit elastic in the perfectly competitive market so the gross revenue is more
b)
economic profit is higher in monopoly than perfect competitive firm
in the monopoly, the firm produces at MR=MC and the demand curve is downward sloping so the firm earns economic profit more than perfect compete it firm
c)
the monopoly supply lower output than the perfectly competitive firm
The perfectly competitive firm produces at MC=P so it produces more than the monopoly

d. Consumer Surplus

The consumer surplus is lower in the monopoly than the perfectly competitive firm, other things depend on the market.

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