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Microeconomics homework (discussion)

This week we’ve begun the study of imperfectly competitive markets by looking at monopolies.  In 75 – 150 words, please compare and contrast monopoly and perfect competition with specific regard to these points.

1. Ceteris paribus, how do their demand elasticities compare? Why?

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2. If you ran a business, would you prefer to be a monopoly or a perfectly competitive firm?  Why?

3. Finally, and only tangentially related, are monopolies guaranteed a profit? Why or why not?

 

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