microeconomics homework assignment for module 6

mod_6_micro_lecture_notes.docx

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Monopoly and Competition: Monopolistic Competition and Oligopoly

After reading the material, think about the negative and positive aspects of monopolies. Look at Figure 1 in Chapter 10. It shows a monopoly diagram. It provides the following information:

· finding the profit maximizing level of output from MR and MC

· finding the ATC at that level of output

· finding the level of profits at that level of output

The characteristics of monopolistic competition include the following:

· many firms,

· differentiated products, and

· some influence over price.

It is important to analyze the historical change in structure. The U.S. auto industry is a classic example: 240 companies entered the market between 1904 and 1908; the industry experienced a fast shake-out, so that by the 1920s, Ford produced about one-half of all cars, a dominance quickly challenged by General Motors and Chrysler. By the year 2000 those same three firms saw their market share erode to about 60 percent. See “The technology sector’s rise and fall is a tale as American as the Model T,” by Hal Varian, The New York Times, Dec. 14, 2000.

Required Videos:

Please review the following videos:

· Monopoly Basics

· Oligopolies and Monopolistic Competition

· Monopolistic Competition and Economic Profit

· Oligopolies, Duopolies, Collusion, and Cartels

· Review of Revenue and Cost Graphs for a Monopoly

Required Web Resources:

Please review the following articles

· Jablanovic, V. D. (2011). The Chaotic Monopoly Price Growth Model. Chinese Business Review, 10(11), 985-989.

· Haidar, J. (2011). A Note on the Social Costs of Monopoly and Regulation. IUP Journal Of Financial Economics, 9(4), 76-79.

· Bo, Z. (2011). Monopoly and Economic Efficiency: Perspective from an Efficiency Wage Model. Modern Economy, 2(5), 830-833. doi:10.4236/me.2011.25092.