ECN 104 Lecture Notes - Umber, Uch, Eaves

1) What is Normal Profit and how is Normal Profit Calculated?[Chapter 8 The Competitive Firm ]

2) Define Market Structure in Economics? Define Perfect Competition. Define Imperfect Competition. [Chapter 8 The Competitive Firm]

3.) Describe the Perfect Competition Firm's Demand Curve and explain why it's that shape. [Chapter 8 The Competitive Firm ]

4.) What is the Profit maximization Rule for a firm in Perfect Competition? [Chapter 8 The Competitive Firm]

A major difference between monopolistic competition and perfect competition is:

a. there are barriers to entry in monopolistic competition. There are no barriers to entry in perfectly competitive markets.

b. monopolistically competitive firms sell differentiated products. Perfectly competitive firms sell identical products.

c. government regulation restricts the ability of monopolistically competitive firms to change their prices. Perfectly competitive firms face no price regulation.

d. the market demand curve in a monopolistically competitive market slopes downward. The market demand curve in a perfectly competitive market is horizontal