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Question 1
The retail market for food and groceries is a monopolistic competition type of market structure because there is more than one store. ... In short-run, monopolistic competition has some rules to maximize their profits. ... In the long-run of monopolistic competition, firms will produce less output than before which then will minimize the average total cost. ... The monopolistic competition industry produces an output at which price equals to average total cost but exceeds marginal cost, which is inefficient. ...
Question 5
The firm will not be able to continue to make an economic profit in the long run because since this is a monopolistic competition, if one firm make an economic profit, new firms will enter the industry and this will results in eliminating the economic profit because the old firms feels the needs to lowers their price to keep their business going.
Question 6
Perfectly competitive market is more efficient compared to monopolistic competition, because in perfectly competitive market, the firm could have exactly the same items in their stores. ... Tom could tell the Australian Competition and Consumer Commission regarding the new market. ...
Question 8
There are four main roles for the Austalian Competition and Consumer Commission. ... The second one is they develop basic supporting structure which increases level for promotion of competition and produce satisfactory results. ... The aim for this is to promote competitive pricing and to restrain price rises in markets where competition isn’t so effective (McTaggart et al, 2003:379).
Approximate Word count = 1100
Approximate Pages = 4.4
(250 words per page double spaced)
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