Economists refer to perfectly competitive firms as price-takers and to monopolies as price-makers. Why?
Answer to relevant QuestionsFor perfectly competitive firms, economic profit exists only in the short run. Why? Inevitably, a firm in monopolistic competition ends up producing where its ATC curve is tangent to its demand curve. Explain. The following table shows cost data for three firms in perfect competition: Draw the supply curve for this perfectly competitive market. What is the difference between balanced and unbalanced oligopoly? Explain the difference between two firms merging and two firms engaging in a joint venture.
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