6. (10 points) Omega Travel competes in the highly competitive market for travel. Consumers know that Omega has the best agents in the industry and offers superior service. Nonetheless, Omega earns zero economic profits because numerous competitors have entered the market over the last few years. Based on this information, does Omega operate in a perfectly competitive market or a monopolistically competitive market? Please give an explanation. 7. (10 points) Alpha Corporation operates in a highly competitive market. While there are only a few other firms in the market due to the high fixed costs of building plants, rival firms are very aggressive in their pricing strategies. Of the products sold in the market, over 80 percent have 10 years of patent protection remaining. Does this industry meet an economist's definition of a perfectly competitive industry? Please give an explanation based on the information in the question and the assumptions about perfect competition. If Alpha Corporation follows all the assumptions of perfect competition, you must explain that. If Alpha Corporation violates some (or all) of the assumptions of perfect competition, you must explain which assumptions it violates and how it violates them.
6. (10 points) Omega Travel competes in the highly competitive market for travel. Consumers know that Omega has the best agents in the industry and offers superior service. Nonetheless, Omega earns zero economic profits because numerous competitors have entered the market over the last few years. Based on this information, does Omega operate in a perfectly competitive market or a monopolistically competitive market? Please give an explanation. 7. (10 points) Alpha Corporation operates in a highly competitive market. While there are only a few other firms in the market due to the high fixed costs of building plants, rival firms are very aggressive in their pricing strategies. Of the products sold in the market, over 80 percent have 10 years of patent protection remaining. Does this industry meet an economist's definition of a perfectly competitive industry? Please give an explanation based on the information in the question and the assumptions about perfect competition. If Alpha Corporation follows all the assumptions of perfect competition, you must explain that. If Alpha Corporation violates some (or all) of the assumptions of perfect competition, you must explain which assumptions it violates and how it violates them.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:6. (10 points) Omega Travel competes in the highly competitive market for travel. Consumers
know that Omega has the best agents in the industry and offers superior service. Nonetheless,
Omega earns zero economic profits because numerous competitors have entered the market over
the last few years. Based on this information, does Omega operate in a perfectly competitive
market or a monopolistically competitive market? Please give an explanation.
7. (10 points) Alpha Corporation operates in a highly competitive market. While there are only a
few other firms in the market due to the high fixed costs of building plants, rival firms are very
aggressive in their pricing strategies. Of the products sold in the market, over 80 percent have 10
years of patent protection remaining. Does this industry meet an economist's definition of a
perfectly competitive industry? Please give an explanation based on the information in the
question and the assumptions about perfect competition.
If Alpha Corporation follows all the assumptions of perfect competition, you must explain that.
If Alpha Corporation violates some (or all) of the assumptions of perfect competition, you must
explain which assumptions it violates and how it violates them.
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