Microeconomic discussion question

In comparing a perfectly competitive market and a monopoly, please answer each of the following questions thoroughly, based on your readings and practice, for full credit. Quality outside research can only help your grade. Please do not create your responses from the information in the text only. The use of outside references, as well as the textbook, must be cited and referenced. This discussion question has 3 parts. All parts must be answered for full credit. Please remember you must not only answer the question, but respond to other students’ postings. The graph is located in the text in Chapter 15 (Figure 15-5).

NOTE: You need to address the graph explicitly in your answer. Part of this question is demonstrating your ability to analyze the graph.  Responses for each part must be in separate paragraphs.

Questions:

a) Compare the competitive price charged and quantity produced under perfect competition and monopoly. Other than identifying the presence of only one producer under monopoly, why do we tend to see this differential?

 b) Does a monopolist achieve efficiency in its production (that is, does it produce where MR = MC)? Will society face a welfare loss in a monopolistic market?

 c) Applying Core Values of responsible stewardship to this question, would you consider that there is never good cause to allow monopolies to operate? Please take into consideration your answer to Part (b).

Responsible Stewardship-  Our Creator blesses us with an abundance of resources. We foster a spirit of service to employ our resources for University and community development. We must be resourceful. We must optimize and apply all of the resources of our community to fulfill Saint Leo University’s mission and goals.