Hello,

Can you please help me regarding the behaviors of economic agents in various situations.

The following guidelines will assist you:

• Answer the following questions regarding the behaviours of economic agents in various situations.

1. Analyze the market behavior of firms in a monopoly.

2. Examine the behavior of perfect competitive markets. How are prices determined in competitive markets? How does competition affect the profits of a firm or industry? What does society gain from market competition?

Attached pictures are going to support you.

Characteristics of Monopoly There has to be a total barrier to entry. If not, a new firm will enter and end the monopoly. There can be no close substitutes for the monopolist's product. There is no competitive pressure. A monopolist will charge a higher price and produce a smaller quantity and will not experience a profit squeeze. A monopolist need not increase quantity even if consumer demand increases. Profit Maximization - Only one price is compatible with the profit-maximizing output. The monopolist will charge that price. If it charges a higher price, profits fall. If it charges a lower price, profits also fall. Market Power - Market power: the ability to alter the market price of a good or service. - A monopoly firm has total market power and confronts the downward-sloping market demand curve for its own output. - This complicates the profit maximization procedure. In imperfect competition (including monopoly), MR no longer equals price. Monopoly - A monopoly is an industry in which there is only one producer. - Thus, there is no competition. A monopolist has significant market power; it can dictate the price. A monopolist does not have to continuously modify its product since there is no competition