1. Monopolists always charge the highest price possible and earn short run economic profits.
2. The defining characteristic of oligopoly is that each firm is mutually interdependent.
3. A firm should shut down in the short run if price is less than average fixed costs.
4. A price discriminating monopolist charges the same price to everyone. (Be sure to point out that a price discriminating monopolist must be the only seller in the market.)
5. There is no reason for a firm in a monopolistically competitive market to advertise and advertising has nothing to do with promoting non-price barriers.
2. The defining characteristic of oligopoly is that each firm is mutually interdependent.
3. A firm should shut down in the short run if price is less than average fixed costs.
4. A price discriminating monopolist charges the same price to everyone. (Be sure to point out that a price discriminating monopolist must be the only seller in the market.)
5. There is no reason for a firm in a monopolistically competitive market to advertise and advertising has nothing to do with promoting non-price barriers.
0 comments:
Post a Comment