The difference between perfectly competitive market and monopoly .

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Answer 1

Question

Chapter 23, Problem 1QP

To determine

The difference between perfectly competitive market and monopoly.

Expert Solution & Answer

Explanation of Solution

Both the productive and allocative efficiencies can only be seen in the perfectly competitive market, where the industry’s demand curve is horizontal. In a horizontal demand curve, price is equal to marginal cost is equal to marginal revenue is equal to average cost is equal to average revenue (P=MC=MR=AC=AR) . Therefore, the resource allocative efficiency P=MC exists in a perfectly competitive market, whereas in a single price monopoly that faces a downward sloping demand curve, the price will be greater than the marginal revenue. The monopoly firm produces at the point where MC=MR while there is no resource allocative efficiency because monopoly sets a price that is greater than the marginal cost.

Economics Concept Introduction

Perfectly competitive market: A perfectly competitive market is a market structure where there are many buyers and sellers, and there are identical products in the market.

Monopoly: Monopoly refers to a market structure with the features of a single seller and more buyers. The firms have full control over the market.

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Answer 2

Question

Chapter 23, Problem 1QP

To determine

The difference between perfectly competitive market and monopoly.

Expert Solution & Answer

Explanation of Solution

Both the productive and allocative efficiencies can only be seen in the perfectly competitive market, where the industry’s demand curve is horizontal. In a horizontal demand curve, price is equal to marginal cost is equal to marginal revenue is equal to average cost is equal to average revenue (P=MC=MR=AC=AR) . Therefore, the resource allocative efficiency P=MC exists in a perfectly competitive market, whereas in a single price monopoly that faces a downward sloping demand curve, the price will be greater than the marginal revenue. The monopoly firm produces at the point where MC=MR while there is no resource allocative efficiency because monopoly sets a price that is greater than the marginal cost.

Economics Concept Introduction

Perfectly competitive market: A perfectly competitive market is a market structure where there are many buyers and sellers, and there are identical products in the market.

Monopoly: Monopoly refers to a market structure with the features of a single seller and more buyers. The firms have full control over the market.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 23, Problem 1QP

To determine

The difference between perfectly competitive market and monopoly.

Expert Solution & Answer

Explanation of Solution

Both the productive and allocative efficiencies can only be seen in the perfectly competitive market, where the industry’s demand curve is horizontal. In a horizontal demand curve, price is equal to marginal cost is equal to marginal revenue is equal to average cost is equal to average revenue (P=MC=MR=AC=AR) . Therefore, the resource allocative efficiency P=MC exists in a perfectly competitive market, whereas in a single price monopoly that faces a downward sloping demand curve, the price will be greater than the marginal revenue. The monopoly firm produces at the point where MC=MR while there is no resource allocative efficiency because monopoly sets a price that is greater than the marginal cost.

Economics Concept Introduction

Perfectly competitive market: A perfectly competitive market is a market structure where there are many buyers and sellers, and there are identical products in the market.

Monopoly: Monopoly refers to a market structure with the features of a single seller and more buyers. The firms have full control over the market.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 23, Problem 1QP

To determine

The difference between perfectly competitive market and monopoly.

Expert Solution & Answer

Explanation of Solution

Both the productive and allocative efficiencies can only be seen in the perfectly competitive market, where the industry’s demand curve is horizontal. In a horizontal demand curve, price is equal to marginal cost is equal to marginal revenue is equal to average cost is equal to average revenue (P=MC=MR=AC=AR) . Therefore, the resource allocative efficiency P=MC exists in a perfectly competitive market, whereas in a single price monopoly that faces a downward sloping demand curve, the price will be greater than the marginal revenue. The monopoly firm produces at the point where MC=MR while there is no resource allocative efficiency because monopoly sets a price that is greater than the marginal cost.

Economics Concept Introduction

Perfectly competitive market: A perfectly competitive market is a market structure where there are many buyers and sellers, and there are identical products in the market.

Monopoly: Monopoly refers to a market structure with the features of a single seller and more buyers. The firms have full control over the market.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 23, Problem 1QP

To determine

The difference between perfectly competitive market and monopoly.

Expert Solution & Answer

Explanation of Solution

Both the productive and allocative efficiencies can only be seen in the perfectly competitive market, where the industry’s demand curve is horizontal. In a horizontal demand curve, price is equal to marginal cost is equal to marginal revenue is equal to average cost is equal to average revenue (P=MC=MR=AC=AR) . Therefore, the resource allocative efficiency P=MC exists in a perfectly competitive market, whereas in a single price monopoly that faces a downward sloping demand curve, the price will be greater than the marginal revenue. The monopoly firm produces at the point where MC=MR while there is no resource allocative efficiency because monopoly sets a price that is greater than the marginal cost.

Economics Concept Introduction

Perfectly competitive market: A perfectly competitive market is a market structure where there are many buyers and sellers, and there are identical products in the market.

Monopoly: Monopoly refers to a market structure with the features of a single seller and more buyers. The firms have full control over the market.

Answer 6

Chapter 23, Problem 1QP

To determine

The difference between perfectly competitive market and monopoly.

Expert Solution & Answer

Explanation of Solution

Both the productive and allocative efficiencies can only be seen in the perfectly competitive market, where the industry’s demand curve is horizontal. In a horizontal demand curve, price is equal to marginal cost is equal to marginal revenue is equal to average cost is equal to average revenue (P=MC=MR=AC=AR) . Therefore, the resource allocative efficiency P=MC exists in a perfectly competitive market, whereas in a single price monopoly that faces a downward sloping demand curve, the price will be greater than the marginal revenue. The monopoly firm produces at the point where MC=MR while there is no resource allocative efficiency because monopoly sets a price that is greater than the marginal cost.

Economics Concept Introduction

Perfectly competitive market: A perfectly competitive market is a market structure where there are many buyers and sellers, and there are identical products in the market.

Monopoly: Monopoly refers to a market structure with the features of a single seller and more buyers. The firms have full control over the market.

Answer 7

Chapter 23, Problem 1QP

To determine

The difference between perfectly competitive market and monopoly.

Answer 8

Expert Solution & Answer

Explanation of Solution

Both the productive and allocative efficiencies can only be seen in the perfectly competitive market, where the industry’s demand curve is horizontal. In a horizontal demand curve, price is equal to marginal cost is equal to marginal revenue is equal to average cost is equal to average revenue (P=MC=MR=AC=AR) . Therefore, the resource allocative efficiency P=MC exists in a perfectly competitive market, whereas in a single price monopoly that faces a downward sloping demand curve, the price will be greater than the marginal revenue. The monopoly firm produces at the point where MC=MR while there is no resource allocative efficiency because monopoly sets a price that is greater than the marginal cost.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Economics Concept Introduction

Perfectly competitive market: A perfectly competitive market is a market structure where there are many buyers and sellers, and there are identical products in the market.

Monopoly: Monopoly refers to a market structure with the features of a single seller and more buyers. The firms have full control over the market.

Answer 12

Ch. 23.1 - Prob. 1ST Ch. 23.1 - Prob. 2ST Ch. 23.1 - Prob. 3ST Ch. 23.3 - Prob. 1ST Ch. 23.3 - Prob. 2ST Ch. 23.3 - Prob. 3ST Ch. 23.3 - Prob. 4ST Ch. 23.5 - Prob. 1ST Ch. 23.5 - Prob. 2ST Ch. 23.5 - Prob. 3ST

The difference between perfectly competitive market and monopoly .

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The difference between perfectly competitive market and monopoly.

Explanation of Solution

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Chapter 23 Solutions