3 and 4 please 2d. Airline tickets cost more during the summer peak flying seaso
ID: 1127036 • Letter: 3
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3 and 4 please
2d. Airline tickets cost more during the summer peak flying season. 3. List and describe the three defining assumptions of the theory of monopolistic competition. 4. Use the three assumptions for monopolistic competition discussed in chapter 12 to decide which of the following firms below are likely to be operating as monopolistic competitors. If they are not monopolistic competitive firms, are they monopolists, oligopolists, or perfectly competitive firms? Why? Explain your answers. a. A local band that plays for weddings, parties,-and so on. b. Minute Maid, a producer of individual-serving juice boxes. c. Your local dry cleaner d. A farmer who produces soybeansExplanation / Answer
3) i) Large number of buyer and seller. ---- there are large number of buyer and seller but seller is not very large as in perfect competition.
ii) price maker --- unlike perfect competition, who are price taker. the monopolistic competition firm have some extent to control the price or price maker.
iii) Product differentiation. =----- In perfect competition , the product is homogenous, but in monopolistic, the product is differentiated but it is slightly different from other product so they are not perfect monopoly.
4) A-) Monopolistic comeptition .--- Because every local band plays different from other . thus they are in monopolistic competition .
B-)--- Monopolistic competiton . --- because they minute maid is juice company who is producing juice like other juice company and hence their product is slightly different from other and thus product is not homegenous and so they are in monopolistic competition.
C) Monopolistic competiton. --- because very local dry cleaner has its own washing machine and thus the qualtity of thier service differ from each other . some qualtity od dry clean is good and some bad . therefore they charge according .and thus their quality od product is different.
D-) Perfect Competition. ---- because every farmer can produce soyabeans. and thus product is homegenous .
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