Question 4 The following graph shows the price, marginal cost, and average cost curves for Patta Sdn Bhd which is a company that produces closed substitute products. 30 25 20 15 110 120 MC Figure 2 3 MR ATC Answer questions (a) to (d) below based on Figure 2. a) Justify the type of market structure the firm is operating in. Justify your answer. b) What is the profit-maximizing price and output for this firm? c) Calculate the amount of profit or loss at the equilibrium point. d) Explain the characteristics of the market structure based on types of products, pricing power, number of firms, and barriers of entry and exit for Patta Sdn Bhd. e) What are THREE (3) examples of companies that exhibit characteristics of oligopoly competition? Why?

Question 4 The following graph shows the price, marginal cost, and average cost curves for Patta Sdn Bhd which is a company that produces closed substitute products. 30 25 20 15 110 120 MC Figure 2 3 MR ATC Answer questions (a) to (d) below based on Figure 2. a) Justify the type of market structure the firm is operating in. Justify your answer. b) What is the profit-maximizing price and output for this firm? c) Calculate the amount of profit or loss at the equilibrium point. d) Explain the characteristics of the market structure based on types of products, pricing power, number of firms, and barriers of entry and exit for Patta Sdn Bhd. e) What are THREE (3) examples of companies that exhibit characteristics of oligopoly competition? Why?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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