Behaviour of firms operating under monopolistic competition


Assignment:

This is assessment: Research Essay

Length 3,000 words

Please note that this task requires substantial research (see the assessment criteria below).

a) What do you understand about the behaviour of firms operating under monopolistic competition? In answering this question, as a minimum, you should discuss:

  • Key features, including the structure of the market place for such firms
  • Using diagrams, explain how short run and long run profits or losses might arise
  • Describe the process by which profits or losses are eroded
  • Comment on productive and allocative efficiency of firms in the model

(b) Choose an industry where monopolistic competition prevails, illustrate and evaluate the behaviour of firms in the market. As a minimum, you should:

  • Provide a brief description of the industry
  • Discuss key features with examples
  • Using examples, evaluate the behaviour of the firms and their net impact on consumers

(c) Using suitable diagrams, illustrate and discuss the negative externalities arise from Adani Group Carmichael coal mine located in Queensland Galilee Basin. Explain the ways in which the market failure associated with coal mining can be addressed.

Additional marks:

Overall presentation of work, the use of graphs and the clarity of written expression

Evidence of research and appropriate use of referencing

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Macroeconomics: Behaviour of firms operating under monopolistic competition
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