ECON 101 Chapter 7: Producers in the Short Run

Develop an understanding of the market structure known as perfect competition. Write a 3-4 page paper in which you describe the market structure of perfect competition in terms of the number of producers, control over price by firms in this market, type of product in terms of differentiation, barriers to entry into this market, and whether economic profit can be made in the short or long-run.

Prepare a 5 page paper that describes the market structures of oligopoly and monopoly in terms of number of producers, types of products produced, barriers to entry, and whether profit can be made in the short or long-run. Also, be sure to note whether oligopolies and monopolies are bad or good for society and explain your answer. Be sure to properly cite all your references.

Econ 528 Spring 2016 Final Exam: Monopoly Due: April 26, 2016, 6 PM 1. Hank Yoon is the economist in a competitive market. The market price is $35 per item. The total cost equation is , and MC = 2 + Q

1.a. What level of output of items should you produce in the short run?

b. What price should you charge in the short run?

c. Will you make any profits (Total Revenue minus Total Costs) in the short run?

d. What will happen in the long run? How would your answers change if your costs were and MC = 5 + 60Q

2. Phillip Haynes is the controller of a company that has the sole authority to manufacture your product. The inverse market demand curve is . Your total cost equation is . What is the output you should produce, the price you should charge, and your profits.

3. You are the project executive of a monopolistically competitive firm. The present demand curve is . Your total cost equation is , and MC = 17Q

a. What level of output should you set to maximize profits?

b. What price would you charge?

c. What will happen in your market in the long run? Explain.