Perfect Competition And Monopoly

Comparison between Monopoly and Perfect CompetitionA competitive trade is one and only(a) in which individual market strong have nada market power . In a prefect competitive market each tauten faces a demand weave that is swimming , because variations in the self-coloureds out(a)put have no noticeable motion on priceA monopoly occurs when one firm called monopolist or monopoly firm produces an industry s entire output . A monopoly sets borderline make up equal to marginal revenue , but the marginal represent is less than the revenueIn a competitive market the production exit happen when demand is equal to the furnish . In the infra figure the market price and outputs are defined at Q1 and Pcomp . At this particular point price is equal to marginal bell , and the market is efficient as per the demand called allocative efficiency only if in a monopoly market the price is increased there by reducing the is equal to marginal revenue . In the interpret towards the right which indicates the monopoly the maximum loot point is at Pmon and Q2 . The monopoly fanny raise the depression the economic welfare . This reduction in the consumer supply will be the profit to the manufacturer But this is not always the case . The producer also suffers a issue Both producer and consumer suffer a loss which is shown in the figure below . This is called deadweight welfare loss alphabet . In this we can see the loss suffered by the producer as well as the consumer . But in a competitive market the price is Pcomp and Q1 respectively Output and profit determinations in short hie and long channelize for spotless competition and monopolyPerfect Competition : Short-run supply curveIn a pure(a) competitive market , the production will b at point when Price is equal to marginal cost MC under the condition that Price is less than the average changeable cost AVC .

From the graph below , marginal cost MC can be used to determine the output the firm will supply wheneverAVC . The MC curve above AVC indicates the bar supplied for the price determined . This is called short run supply curve . In general , a perfectly competitive firm s short-run supply curve is the portion of its marginal cost curve that lies above the AVC curve Long solve make out curveA firm will be in long run if the firm makes positive effect on the market with out losses . If the current equilibrium price results in winnings the firm enters the market . But as the market supply increases the equilibrium falls . Thus the entry into the market is hebdomad . This is zero economic profit in long run as shown in the figure below .Monopoly : short Run monopolyIn a monopoly the firm is price maker but cannot indicate a price the customer cannot afford to bear . The plat below shows the short term price and output levels in a monopoly If the price is raised from P1 to P2 in monopoly , the net effect is reduction in the raise in costs depends on the price...If you want to get a full essay, order it on our website: Orderessay

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