$25, which is higher than what the price would have been if the industry were a pure monopoly $25, which is lower than what the

Question

Taya2010 [7]

2 years ago

11

$25, which is higher than what the price would have been if the industry were a pure monopoly $25, which is lower than what the

price would have been if the industry were a pure monopoly $20, which is higher than what the price would have been if the industry were a pure monopoly $20, which is lower than what the price would have been if the industry were a pure monopoly

Business

1 answer:

Paul [167] · Answer 1 · 2022-01-23T04:57:38+03:00

Answer: $25, which is lower than what the price would have been if the industry were a pure monopoly

Explanation:

Your question is incomplete as it is missing some elements.

I have attached it to this answer.

In a Perfect Competition, the price is set at the point where Marginal Cost equals Marginal Revenue. It is worthy of note that in a Perfect Competition, the Marginal Curve and the Demand curve are the same so the point where MC intersects the Demand Curve in the graph is the price they will charge at which is $25.

This will however be less than what Monopoly would charge. A Monopoly would also charge at the point where Marginal Revenue equals Marginal cost. For the Monopoly that point is given at the 90 output point. If you then plot it to the Demand curve you will find that it is a figure greater than $25 which is Pm in the other graph I attached. That is what the price would be in a perfect Monopoly.