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    Monopolist point of view and a Pure Competition point of view

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    Assume that a pure monopolist and a purely competitive firm have the same unit costs. Contrast the two firms in the long run equilibrium with respect to the following:
    a) Price charged
    b) Output produced
    c) Profits
    d) Allocation of resources
    e) Impact on income distribution

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    Monopoly and Pure Competiton
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    I have a hard time distinguishing between a Monopolist point of view and a Pure Competition point of view!!!!!

    Assume that a pure monopolist and a purely competitive firm have the same unit costs.doc

    Assume that a pure monopolist and a purely competitive firm have the same unit costs. Contrast the two firms in the long run equilibrium with respect to the following:
    a) Price charged
    b) Output produced
    c) Profits
    d) Allocation of resources
    e) Impact on income distribution

    Answer

    a) Each firm in the perfectly competitive market acts as a price taker. The price are given and set by the industry demand and supply curve. Many suppliers each with an insignificant share of the market - this means that each firm is too small relative to the overall market to affect price via a change in its own supply - each individual firm is assumed to be a price taker.
    But the firm with monopoly has price-setting power and will look to earn high levels of profit. A pure ...

    Solution Summary

    This job offers help with distinguishing between a Monopolist point of view and a Pure Competition point of view.

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