THERE ARE TOTAL OF TWO PARTS FOR THIS ASSIGNMENT
PLEASE SEPARATE THE ANSWERS FOR EACH PART.
EX) PART 1) —– PART 2)—-
I HAVE ATTACHED A EXAMPLE ANSWERS FROM THE CHEGG (ONLINE) FOR PART 1
SO YOU CAN JUST PARAPHRASE IT AND MAKE IT INTO YOUR OWN WORD BASED ON THE ANSWERS THAT I PROVIDED YOU FOR
PART 1.
PART 1)
Please answer the following questions:
1) List the five characteristics of pure monopoly.
2) Describe the demand curve facing a pure monopoly and how it differs from that facing a firm in a purely competitive market.
3) Explain why the marginal revenue is equal to the price in pure competition but not in monopoly.
4) Use the chart to solve the following:
Calculate the Marginal Cost at Q 100?
Calculate the Marginal Cost at Q 200?
Calculate the Average Total Cost at Q 200?
Q
P=D
TC
0
$30.00
$3,000
100
$20.00
$4,500
200
$10.00
$6,500
PART 2)
Please read the article:
http://www.priceintelligently.com/blog/bid/184451/How-Starbucks-Uses-Pricing-Strategy-for-Profit-Maximization
1) What is a purely competitive market?
2) Why type of market would Starbucks belong to?
3) Why do you think Starbucks increased its prices by 1%, and do you believe that this action is risky, or a safe bet?