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Model 1: equilibrium with new firms entering the industry:
In this model it is assumed that each firm is in short-run equilibrium, maximizing its profits at abnormally high levels. Such a situation is shown in figure 8.2. The firm, having the cos...
Monopolistic Competition (with Assumptions)
Monopolistic Competition (with Assumptions)
Product Differentiation and the Demand Curve
Main Features of Monopolistic Competition The main features of monopolistic competition are as under: 1. Large Number of Buyers and Sellers:
Main Features of Monopolistic Competition
Price-Output Equilibrium under Monopolistic Competition: Equilibrium in Short-Run and Long Run!
Under monopolistic competition, organizations need to make optimum adjustments in the prices and output sold to attain equilibrium. Apart from this, under monopolistic competition, organi...
Demand and Marginal Revenue Curves (With Diagram)
Monopoly Equilibrium in Case of Zero Marginal Cost:
In certain situations, it may happen that MC is zero, which implies that the cost of production is zero. For example, cost of production of spring water is zero. However, the monopolist will...
Determining Price and Output under Monopoly: Suppose demand function for monopoly is Q = 200-0.4Q
Price and Output Determination under Monopoly
simplify product group analysis, Chamberlin has given two assumptions, which are as follows:
i. He assumed that the demand and cost curves of all products forming the group are the same or uniform. This assumption is termed as uniformity assumption. According to this assumption, the...