Answer question #3

3. Competition (26 points) Complete parts a and b. a. Which type(s) of industry competition, of the four studied, displayed allocationficiency? Does allocation efficiency exist in the short-run, long-run, or both? b. How does a monopolist or monopolistically competitive firm determine graphically if the demand for its product is elastic, unit elastic or inelastic? Why does it want to operate where demand is elastic? Complete either parts c and d OR parts e and f. c. How is price determined, graphically, for the monopoly and monopolistically competitive firm? Why is it different for these two compared to how the purely competitive firm determines its price? In your response, explain how the price is set for the purely competitive firm. d. Which of the four forms of industry competition have advertising? Why is advertising experienced in this/these form(s) of competition and not experienced in the other form(s) of competition? c. Which type(s) of industry competition exhibits mutual interdependence? Why is it experienced in this type(s) of industry competition and not the other type(s)? f. Why does monopolistic competition exhibit excess capacity? What type of efficiency is not being realized because of it? To achieve this type of efficiency, what should happen to the number of firms within this industry