Question: Markets and Market Structure

Given the following graphs and information answer the following questions (a) – (c) (1) Q*=10,000 (2) P _market = $25 (3) q* = 2000 (4) ATC at q* = 20

-make sure to show work and method for all of the questions.

P

MC

Firm

Market

S

P

Graphically:

D _firm

P _market

D

Q

Q

q*

1. How many firms are supplying the market?
2. What are the revenues, profits, and costs for the entire market and an individual firm? Make sure to show your work and method.
3. What type of market is the above illustrating? Please explain.
4. Show how a monopoly profit maximizes. Please explain how the results differ from that of a firm in perfect competition.
5. From an efficiency standpoint explain why a Monopolist market is less efficient than a perfectly competitive market.
6. Show and explain what the shutdown rule for production is. Use the PC market to do so.

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