Turn on thread page Beta

Monopoly and Monopolostic Competition watch

Announcements
    • Thread Starter
    Offline

    0
    ReputationRep:
    Are the Monopoly and Monopolistic Competition graphs the same for both market structures? With the monopolistic competition graph having a long term shift in AC upwards to the point where Average Cost curve is tangental to the point MR=MC with respect to Demand/Average Revenue.

    Hope this doesn't confuse!

    What I'm asking is are they the same graph for both in the short term, with monopoly remaining the same in its long run.
    • Thread Starter
    Offline

    0
    ReputationRep:
    bump
    • PS Helper
    Offline

    4
    ReputationRep:
    PS Helper
    I thought AR shifts in the long run untill it's tangent to AC for monopolistic competition.
    Offline

    12
    ReputationRep:
    In the SR, yes, they're both the same. In the LR, though, the AC curve is tangential to the AR curve, not to MR=MC (although the point MR=MC should 'lead' to a price where AC=AR, hence normal profit)
    • Thread Starter
    Offline

    0
    ReputationRep:
    (Original post by unamed)
    In the SR, yes, they're both the same. In the LR, though, the AC curve is tangential to the AR curve, not to MR=MC (although the point MR=MC should 'lead' to a price where AC=AR, hence normal profit)
    Thanks! So in the SR are the AC curves the same, or are their minimum points at differents?
    Offline

    12
    ReputationRep:
    (Original post by sakina101)
    Thanks! So in the SR are the AC curves the same, or are their minimum points at differents?
    well, I draw both the SR and LR onto one diagram, in which case the AC curves are the same, but the AR/MR curves have been shifted.
 
 
 
Reply
Submit reply
Turn on thread page Beta
Updated: January 28, 2010

University open days

  • University of Lincoln
    Brayford Campus Undergraduate
    Wed, 12 Dec '18
  • Bournemouth University
    Midwifery Open Day at Portsmouth Campus Undergraduate
    Wed, 12 Dec '18
  • Buckinghamshire New University
    All undergraduate Undergraduate
    Wed, 12 Dec '18
Poll
Do you like exams?

The Student Room, Get Revising and Marked by Teachers are trading names of The Student Room Group Ltd.

Register Number: 04666380 (England and Wales), VAT No. 806 8067 22 Registered Office: International House, Queens Road, Brighton, BN1 3XE

Write a reply...
Reply
Hide
Reputation gems: You get these gems as you gain rep from other members for making good contributions and giving helpful advice.