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  00 Edited Micro Extra Credit Assignment BIU EIE 1

Economics

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00 Edited Micro Extra Credit Assignment BIU EIE 1.0 Helvetica • Regular 11 a 1 4 B 10 11 12 13 2 6 7 A. 1 = One, 2 = Few, 3 = Several, 4 = Many B. 1 = Differentiated, 2 = Similar, 3 = Unique, C. 1 = Price taker, 2 = Price setter, 3 = ranges from price taker to price setter D. 1 = No barriers, 2 = Strong barriors, 3 = Weaker Barriers, E. 1 = Free entry & exit, 2 =No entry & exit, 3 = Limited entry & exit, F. 1 = Profit maximization, 2 Joint profit maximization G. 1 = P = MC, 2 = P> MC, 3 =P MC H. 1 = No - no market power, 2 = Yes - strong market power, 3 = Yes- if firms collude, & no- if firms compete, I. 1 = Yes, it's possible, 2 = No, it's not possible, J. 1 = None, 2 = Yes, 3 = Yes- if firms collude, & no- if firms compete, For each of these market structures, what are the prevailing characteristics that pertain to the stated market traits? (40points) Perfect Competition Monopolistic Oligopoly Monopoly Market Traits Competition A. Number of Firms 4 4 2 1 How many firms exist in each market? B. Nature of Product 1 Can be both 1 & 2 3 Describe nature of 2 product? C. Price setting 2 3 2 Describe price setting 1 taking behavior? D. Barriers to Entry 1 3 2 2 Describe state of barriers to entry? E. Entry & Exit 2 3 2 Is there free entry & exit? 1 1 1 2 1 1 1. 2 1 2 3 2 F. Profit Goal What is the firm(s) profit goal? G. Pricing & MC How does Price & MC relate? H. Market Power Do firms have market power? 1. Short Run Profit Is there SR profit? J. Long Run profit Is there LR profit? 1 1 1 1 1 1 2 2