Economics Department
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Economics Department |
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Monopolistic competition and objectives
1) Is profit maximisation a reasonable assumption for public limited companies? (20 marks) 2) A firm in monopolistic competition is initially in long run equilibrium. Analyses the short and long run impact on price output and profitability of a substantial increase in the industry demand for the product that the firm supplies. (20 marks) 3) Perfect competition will lead to lower prices, higher output and greater profitability than monopolistic competition. Examine the circumstances under which this will be so. (20 marks) 4) Explain why profit maximisation will occur at the output at which MC=MR. Why will only normal profits be earned in the long run in monopolistic competition. (20 marks) 5) How are firms in monopolistic competition most likely to compete? (20 marks) |