PakMonoG’s inverse demand function is P = 100 – 2Q and cost function is TC = 10 + 2Q, where Q is quantity in units and P price in PKR. (need answers of 2 & 3) 1. Given your calculations in (a), illustrate the demand, marginal revenue and marginal cost curves of the firm in a graph. 2. If we were to compare PakMonoG with a perfect competitive firm in the market, are there differences in characteristics of the two structures? 3. What are welfare implications? Is total societal welfare of the firm higher or lower than that of a competitive firm? Support your answer using the graph in (b) above
PakMonoG’s inverse demand function is P = 100 – 2Q and cost function is TC = 10 + 2Q, where Q is quantity in units and P price in PKR. (need answers of 2 & 3) 1. Given your calculations in (a), illustrate the demand, marginal revenue and marginal cost curves of the firm in a graph. 2. If we were to compare PakMonoG with a perfect competitive firm in the market, are there differences in characteristics of the two structures? 3. What are welfare implications? Is total societal welfare of the firm higher or lower than that of a competitive firm? Support your answer using the graph in (b) above
Chapter9: Perfect Competition
Section: Chapter Questions
Problem 2WNG
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PakMonoG’s inverse demand function is P = 100 – 2Q and cost function is TC = 10 + 2Q,
where Q is quantity in units and P price in PKR. (need answers of 2 & 3)
1. Given your calculations in (a), illustrate the demand, marginal revenue and marginal cost
2. If we were to compare PakMonoG with a
3. What are welfare implications? Is total societal welfare of the firm higher or lower than that of a competitive firm? Support your answer using the graph in (b) above.
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