Competition and Market Power
Review the following questions and prepare a 4- to 5-page paper on the following questions:
- Explain the difference between the demand curve facing a monopoly firm and the demand curve facing a perfectly competitive firm.
- Which of the following is (are) most likely to be produced under conditions resembling a monopoly: oil, automobiles, diamonds, electricity transmission, and eggs. Defend your answer in economic terms.
- Name one monopoly firm you deal with. What is the source of its monopoly power? Do you think it seeks to maximize its profits?
- This module focuses on four types of firms:
- perfectly competitive
- monopolistic competitive
Which of the above firms would most likely have zero economic profit in the long run? (It can be more than one type.) Explain.
Use concepts from the modular background readings as well as any good-quality resources you can find. Be sure to cite all sources within the text and provide a reference list at the end of the paper.
Length: 4–5 pages double-spaced and typed.
The following items will be assessed in particular:
- Your ability to understand the differences between perfect and imperfect competition.
- Some in-text references to the modular background material (APA formatting not required).
- The essay should address each element of the assignment. Remember to support your answers with solid references including the Case readings.