# Finals - Microeconomics - Chapter 9

## 11 terms

### downward sloping

shape of the monopoly demand curve

### elbow

shape of the perfect competition demand curve

### ar is downward sloping so mr has to be below it, pulling it down

why does mr have to be lower than price for a monopoly?

### ar = tr / qsold = p * qsold/qsold = p

relationship between ar and p for a monopoly

### 1. choose best production level (mr = mc) 2. choose the best price (highst one that still sells) 3. use production table to find labor hours 4. calculate the profit = tr - tc

profit maximization rules for monopolies

### box from TP on demand curve over to price and down

where to find the tr box for a monopoly's production graph

### box from TP on ATC curve over to y-axis and down

where to find the tc box for a monopoly's production graph

### higher price, lower production vs. lower price, higher production

price, production for monopoly vs. perfect competition

### ATC, d, and MC intersect at the same point; no economic profit; no new firms enter

long run for perfect competition

### higher atc (to the left of the atc curve) which causes a higher price in the long run compared to perfect competition

long run for monopolistic competition

### we get a higher variety in return

why do we accept higher long run prices for monopolistic competition firms than we do with firms that are in perfect competition?

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