Due Date Wednesday by  June 19   by 4PM Central TimeAttachment TheoryThe adolescent stage can be described as a time where there is a loss of innocence and a preentry into adulthood. A large pa

Problem #1

The following graph shows the market demand and cost of production in the long run in an industry.

Furthermore, assume that the demand and LATC equations are given as follows:

D: P=1000-2Q

LATC= 500-0.3Q

LMC= 500-0.6Q

1. If firms behaves as monopolist then price will be ______ on the graph, which is $______, the firm is earning _________In the amount of ____________ because price exceeds the ____________, thus, TR must also exceed the _____________.

2. If unregulated, unlike a perfectly competitive firm, this firm may continue to earn _____________ in the long-run.

3. If the firm behaves similar to a competitive firm, the price is _______on the graph and is $____________, the long run economic profit would be _________________ . This price is less than/more than the LATC, and the firm would _____________________ in the long-run.

4. If regulators wanted to ensure zero economic profit for the firm, the price would be set at _______, which is $___________.

5. This is an example of a market structure that we call______________________. In the business world an example of this situation would be _______________________________________________________________.

Problem #2

The following monthly demand and supply equations for DVD players in a market are given.

D: P = 800 - 2Q S: P = 100 + 3Q.

a. The equilibrium price and quantity under perfect competition will be _______ and ________.

b. The total gain in efficiency in the DVD market under perfect competition is $________________.

c. If the production and disposal process impose a negative externality such that the social MC is 1.5 times of the private MC given above, the socially optimum price and quantity produced are___________, and ___________, respectively.

c. Assume that a monopolist takes over the market. The equilibrium price and quantity will be _______ and ________.

d. In the following graph, label prices and quantities computed in both cases, and identify the loss in economic efficiency (dead weight loss) due to the monopoly market structure.

Problem #3

In the “real world” the market structure that dominates retailing is _______________________, Firms in ____________________ market structure compete based on ________________________________________________________. They may have ____________________________________ in the short- run, but in the long –run economic profits move toward ______________________ as more firms ______________________________ and demand for a single firm’s product or services ______________.

Problem #4

The behavior of oligopolistic firms is interdependent. One way of demonstrating how oligopolistic firms may behave is chaos theory /game theory, which shows that most cartel agreements maybe __________________________ as firms have incentive to _____________________________.

Problem #5

The intent of anti-trust legislation is to promote _______________________________ and prevent formation of ___________________________________. Some examples of anti-trust laws are _________________________________________________.