CHAPTER-6. NON-COMPETITIVE MARKETS

What is meant by prices being rigid? How can oligopoly behaviour lead to such an outcome?

If duopoly behaviour is one that is described by Cournot, the market demand curve is given by the equation q = 200 - 4p and both the firms have zero costs, find the quantity supplied by each firm in equilibrium and the equilibrium market price

List the three different ways in which oligopoly firms may behave.

What is the reason for the long run equilibrium of a firm in monopolistic competition to be associated with zero profit?

Explain why the demand curve facing a firm under monopolistic competition is negatively sloped.

Will the monopolist firm continue to produce in the short run if a loss is incurred at the best short run level of output?

The market demand curve for a commodity and the total cost for a monopoly firm producing the commodity is given in the schedules below.

Use the information given to calculate the following:

(a) The MR and MC schedules

(b) The quantities for which MR and MC are equal

(c) The equilibrium quantity of output and the equilibrium price of the commodity

(d) The total revenue, total cost and total profit in the equilibrium

Comment on the shape of MR curve in case when TR curve is a

1. positively sloped straight line

2. horizontal straight line

If the monopolist firm of Exercise 3, was a public sector firm. The government set a rule for its manager to accept the government fixed price as given (i.e. to be a price taker and therefore behave as a firm in a perfectly competitive market). And the government decide to set the price so that demand and supply in the market are equal. What would be the equilibrium price, quantity and profit in this case?

A monopoly firm has a total fixed cost of Rs 100 and has the following demand schedule:

Find the short run equilibrium quantity, price and total profit. What would be the equilibrium in the long run? In case the total cost is Rs 1000, describe the equilibrium in the short run and in the long run.

What is the value of the MR when the demand curve is elastic?

From the schedule provided below calculate the total revenue, demand curve and the price elasticity of demand:

What would be the shape of the demand curve so that the total revenue curve is

(a) a positively sloped straight line passing through the origin?

(b) a horizontal line?