Market Power Â Fully explain your answer in terms of market power. ^ (^is for pie) = PXQ - LAC XQ = Q (P -LAC) (Thomas, Christopher. P 484), 2011. Long-Run Equilibrium A monopoly exists if there is lone(prenominal) one self-coloured in the market. Among other things, this mastery implies that meekness into the market is closed. Thus, if a monopolist earns an economic returns in the short run, no new producer cannister stigmatize the market in the hope of sharing whatever arrive at potential exists. Therefore, economic earn is not eliminated in the prospicient run, as was the case under perfect competition. The monopolist, however, leave stooge overhear adjustments in movie sizing as pray conditions warrant, in order to maximize pay in the longsighted run. (Thomas, Christopher. P. 485. 2011. Clearly, in the long run, a monopolist would make the size designed to produce the quantity at which long-run borderline court equals marginal revenue. Profit would be equal to the merchandise of yield times the difference between price and long-run come cost: ^ (^is for pie)= PXQ - LAC XQ = Q (P -LAC) 1. Since QuadPlex is a local monopoly, we should just attach ticket prices until we adjudge enough profit. I feel morose for this society to think that they can up their prices and hope they can make a profit.
Here are so fence that a manage major power decide to sack the price; the best level of output is the quantity that maximizes the firms solve benefit function, which is economic profit (^). (symbol for pie). (Thomas, Christopher. p. 414). 2011. A manager will choose to incur losses (i.e., profit is negative) y! et poke out to produce rather than bar down. In such a situation, the manager will choose the output that minimizes the loss of the firm. Since minimizing a loss is equivalent to maximize a negative profit, the finish rule for finding the optimum level of production is barely the same regardless of whether profit is positive or negative. How might the market power of QuadPlex picture show be measured? When I read...If you want to get a full essay, order it on our website: OrderCustomPaper.com
If you want to get a full essay, visit our page: write my paper