Please answer the following questions. Submit as a Microsoft Word® document to the Dropbox when completed.
1. How does the demand curve faced by a perfectly competitive firm differ from the market demand curve in a perfectly competitive market? Explain.
The demand curve for a good or service produced in a perfectly competitive market is downward sloping. In a market demand curve, the line is horizontal because the price is set at market value. If a product is sold below market price then they will lose revenue and if it is above that then no one will buy the product.
2. A perfectly competitive firm has the following fixed and variable costs in the short run. The market price for the firm’s product is $140.
a.Complete the table
b.What level of output should the firm produce to maximize profits?
3. How does the demand curve faced by a monopoly differ from the demand curve faced by a perfectly competitive firm? Explain.
In a perfectly competitive firm, the price is set and fixed. This means that the demand curve is a horizontal straight line. On the other hand, the demand curve for a monopoly is the demand curve itself since the monopolist is the only player in the market and can set the price at any level it wants.
4. The following table provides market share information about the soft-drink industry.
|Company |Market Share | |Coca-Cola |37%...