2. Monopolies are firms who dominate the market. A monopoly tends to set higher prices than a competitive market, leading to a lower consumer surplus. However, on the other hand, monopolies can benefit from economies of scale, leading to lower average costs, which can, in theory, be passed on to consumers. Distinguish between monopoly, pure monopoly and bilateral monopoly by providing specific support for your claim.

2. Monopolies are firms who dominate the market. A monopoly tends to set higher prices than a competitive market, leading to a lower consumer surplus. However, on the other hand, monopolies can benefit from economies of scale, leading to lower average costs, which can, in theory, be passed on to consumers. Distinguish between monopoly, pure monopoly and bilateral monopoly by providing specific support for your claim.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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USUALLY THERE IS MORE THAN ONE !! ANSWER!!! Select the statements below that are consistent with the input choice decisions of profit-maximizing competitive firms and monopolies. Choose one or more: A. Monopolistic firms choose inputs of production at the point where the marginal revenue from each input equals the marginal cost. Competitive firms do not. B. Competitive firms choose inputs of production at the point where the marginal revenue from each input equals the marginal cost. Monopolies do not. C. For competitive firms, the marginal revenue product of an input equals the value of the marginal product. D. If the demand for a product is perfectly elastic, all else being equal, the optimal amount of an input of production is the same for a monopolist as it is for the competitive market as a whole. E. For a monopoly facing a downward-sloping demand curve, the marginal revenue product of an input equals the value of the marginal product. F. Competitive firms and monopolies choose…
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