Economics Case Study Paper

$

Profit Loss Breakeven

$ $

Pure Competition

Q Q Q

MC

ATC D=AR=MR

P

QD

The Firm The Firm The Firm

MC ATC

D=AR=MR P

QD

ATC

MC

ATC

D=AR=MRP & ATC

QD

ATC

Area of economic

profit

Area of economic

loss Normal profit

$

Profit Loss Breakeven

$ $

Pure Monopoly Competition

Q Q Q

MC

ATC

D=AR

P

QD

The Firm The Firm The Firm

MC

ATC

D=AR

P

QD

ATC MC

ATC

D=AR

P & ATC

QD

ATC

MR

Area of economic

profit

Area of economic

loss Normal profit

MR MR

$

Profit Loss Breakeven

$ $

Monopolistic Competition

Q Q Q

MC

ATC

D=AR

P

QD

The Firm The Firm The Firm

MC

ATC

D=AR P

QD

ATC MC

ATC

D=AR

P & ATC

QD

ATC

MR

Area of economic

profit

Area of economic

loss

Normal profit

MR MR

$

Profit Loss Breakeven

$ $

Oligopoly Competition

Q Q Q

MC

ATC

D=AR

P

QD

The Firm The Firm The Firm

MC

ATC

D=AR

P

QD

ATC MC ATC

D=AR

P & ATC

QD

ATC

MR

Area of economic

profit

Area of economic

loss

Normal profit

MR MR

Long run Average total cost Curve

Cost

Output

Economies of scale

Constant returns to scale

Diseconomies of scale

McDonald’s: M New Jersey Natural Gas: N American Airlines: A Farmer Jones: J

M

N A

J

Minimum efficient scale