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Examples of monopoly and perfect competition

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Review and answer the following questions:

1. The official "Incredible Edible Egg" Web Site: Go to: http://www.aeb.org/. This website is sponsored by the American Egg Board. Among other things, the site is clearly an advertisement for the egg industry.

Have you ever seen or do you expect to see advertising for individual egg producers? What characteristics of the good make the market competitive?

2. Oligopoly

The OPEC Oil Cartel Go to www.opec.org. What are the organization's stated goals, which countries are members, and when was it founded? Is it normal for them to be successful in keeping oil prices high, or have they faced difficulties in keeping the cartel united in the past?

3. Antitrust Enforcement and the Consumer
The following is the to the United States Department of Justice's view of its role in antitrust enforcement. Retreived February 25, 2009:
http://www.usdoj.gov/atr/overview.html.

Do you think the U. S. Government is doing enough in this area? Be specific citing examples.

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Solution Preview

Eggs are pretty much identical, which is a characteristic of perfect competition. When goods are identical, producers must charge the same price. If one charged more, people would simply switch to a competing producer who charged less, since eggs are the same. Also, eggs are all sold in supermarkets, so consumers aren't motivated by the location of one producer being closer geographically than another. When the products differ, producers can charge different amounts since consumers can justify the higher price as necessary to obtain the special characteristics of that particular product.

Egg producers would not advertise separately for the same reasons. They would essentially be ...

Solution Summary

Anti-trust regulation, OPEC, advertising with regard to perfect competition

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See Also This Related BrainMass Solution

Perfect competition and monopoly comparison using specific examples that include ATC, Quantity sold, price, MC, MR, etc.

(1) Global Investment Group operates in a perfectly competitive industry with the following Cost and Revenue data:

Average Total Cost = $2.50; Quantity sold = 9000 Units; Price Per Unit = $3.50; Marginal Revenue = $3.50; Marginal Cost = $3.50:

(a) What is the loss minimizing output level for the firm?

(b) What is the Average Profit or Loss for the firm?

(c) What is the Total Profit or Loss for the firm?

(2) Global Marketing Group operates in a monopolistic competitive industry with the following Cost and Revenue data:

Average Total Cost = $5.00; Quantity sold = 5000 Units; Price Per Unit = $9.00; Marginal Revenue = $4.00; Marginal Cost = $4.00:

(a) What is the profit maximizing output level for the firm?

(b) What is the Average Profit or Loss for the firm?

(c) What is the Total Profit or Loss for the firm?

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