Exercises

2. Exercises Chapters 13-17

3. Do you know … • which market structure produces • the highest output? • the lowest output? • which market structure charges • the lowest price? • the highest price? • which market structure is • the most efficient? • the least efficient?

4. Comparing prices and outputs in different market structures • Perfectly competitive market (Pc and Qc) • Monopolistically competitive market (Pmc and Qmc) • Oligopoly (Po and Qo) • Monopoly (Pm and Qm)

5. The Exercise • The figure in the next slide depicts the demand curves in four different market structures. Assume that all four markets have the same MC curve. • Determine the linear equations for all curve, AR, MR, and MC curves. • Solve for the profit-maximizing quantities and prices in all four markets. • Compare P with MC, prices, and outputs.

6. Demand and MC curves

7. Demand, MR, and MC curves

8. Linear equations

9. P*, Q*, and MC*

10. Comparisons

11. Calculating DWL

12. Now you know … • which market structure produces • the highest output; • the lowest output. • which market structure charges • the lowest price; • the highest price. • which market structure is • the most efficient; • the least efficient.

13. See You! Take Care!