A profit-maximizing monopolist produces at an output rate at which marginal revenue exceeds marginal cost.

  1. “Unlike a perfect competitor, a profit-maximizing monopolist produces at an output rate at which marginal revenue exceeds marginal cost.” Valuate this statement and explain why it is correct or incorrect.
  2. Explain the differences in advertising approaches that firms should take depending in whether they are in markets that constitute perfect competition, monopolistic competition or oligopolistic competition.
  3. Explain how the prisoners’ dilemma can be used to examine pricing strategies in an oligopoly.
  4. Although there are only a few major cell phone service providers in the US, explain why this oligopoly of today is much different than the telecommunications competition landscape that existed when there were only a few telephone companies in the 1980s and before.

Sample Solution

ACED ESSAYS