Purchase Solution

Perfect vs imperfect competition

Not what you're looking for?

Ask Custom Question

The following information is available about a firm:

Output 0 1 2 3 4 5 6 7 8
Total Revenue - 30 60 9 120 150 180 210 240
Total Costs 70 100 122 135 140 145 154 179 220

a) Is the firm producing under perfect or imperfect competition? Explain.
b) What are its fixed costs?
c) What is the marginal revenue?
d) Calculate the marginal cost at all output levels.
e) State what output will the firm produce and explain why.
f) What is the market price?
g) What is its profit?

Purchase this Solution
Solution Summary

This solution gives step-by-step calculations and accompanying descriptions for determining a firm's fixed costs, marginal revenue, marginal costs, market price and factors affecting its output, as well as providing an explanation that delineates if the firm is producing under perfect or imperfect competition.

Solution Preview

a) In perfect competition, if a firm that changes the quantity it sells, this does not affect prices. In imperfect competition, a firm can change prices by changing its output. From the chart, we see that the marginal revenue (MR) is 30 for each unit, regardless of how many units sell. Since the marginal revenue equates to the ...

Purchase this Solution
Free BrainMass Quizzes
Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

View More Free Quizzes
Related BrainMass Solutions

  • Marginal Revenue, Marginal Cost , Maximum Profit Rule

    c) increase its output in both perfect and imperfect competition d) decrease its output in both perfect and imperfect competition e) do none of the above. Answer: c) increase its output in both perfect and imperfect competition.

  • Profit maximizing level of output

    Imperfect competition is also defined with respect to the distribution of consumer and producer surplus. Under perfect competition each gets to keep one's own.

  • Monopolistic competition

    monopolist is more efficient The monopolist is a(n): imperfect competitor and has a horizontal demand curve imperfect competitor and has a downward sloping demand curve perfect competitor and has a horizontal demand curve perfect

  • Quotas vs tariff dilemma

    There is a theory of tariff-quota equivalence which assumes perfect competition.

  • Current Market Conditions

    Moving on, in this part of the paper, we will compare and contrast, as to how market differs in perfect and imperfect market competition.// Perfect and Imperfect Market Generally, industries are divided on the level of competition.

  • Imperfectly competitive markets

    Price under perfect competition market Under the perfect competition market, there is same price of the commodity while under the imperfect competition market; there are different prices of the same commodity and close substitutes.

  • four market types

    Perfect Competition 4. Monopolistic Competition The market is mainly divided in two types one is the imperfect competition and the other is the perfect competition.

  • Defining the Perfect Capital Market

    535871 Defining the Perfect Capital Market Define the three conditions that make up a perfect capital market, and then compare and contrast the effects of perfect capital markets to the imperfect capital markets on value.

  • debate between Plato and Aristotle in terms of their philosophical worldviews

    These models are eternal, transcendent, omnipresent, perfect, and archetypal. The things that we have in the physical world are imperfect copies of those archetypes.

View More Related Solutions