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    characteristics of a perfectly competitive market

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    1. What are the main characteristics of a perfectly competitive market that cause buyers and sellers to be price takers?

    2. A perfectly-competitive firm (a firm that operates in a perfectly competitive market) has the following cost function:

    TC = 2000 + 10Q + 0.02Q^2

    The market price is $25, so that TR = PQ = 25Q.

    What is the optimal (profit-maximizing) output level?
    What is MR at that level?
    What is MC at that level?
    What is the profit at that level?

    3. Explain a monopolist's output and price decisions.

    4. A monopoly firm has the following cost function:

    TC = 10000 + 100Q + 0.02Q^2

    and it faces a market demand function:

    Q = 20000 - 100P

    What is the firm's optimal (profit-max) output?
    What is the profit-maximizing price that the firm charges?
    What is the maximum profit?

    Please refer to attached word document.
    thanks

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    https://brainmass.com/economics/production/characteristics-of-a-perfectly-competitive-market-70051

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    Solution Summary

    A monopolist's output and price decisions are explicated.

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