Describe the difference in market structure between monopoly and oligopoly
What will be an ideal response?
Monopoly has only one producer because the product is unique, or has no close substitutes, or government gives it the exclusive authority to produce and sell that product.
Oligopoly has relatively few large firms producing standardized or differentiated products, but for which entry into or exit from the industry is very difficult, so that they are mutually interdependent in their pricing-output decisions.
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The largest volume of trade in the world occurs between the United States and
a. Russia b. Japan c. Mexico d. Canada e. Britain
Pie-Oh-My, a monopolistically competitive firm, is producing 80 gourmet pies per day and selling each pie for $32. At that production level ATC is $40, AVC is $30, AFC is $10, and both MR and MC are $16. In the short run, this firm should
A. increase output to the point where price equals marginal cost. B. shutdown and produce zero pies and pay fixed costs. C. decrease output to the point where price equals average total cost. D. continue to produce 80 pies, as price is greater than AVC.