Firms in the short-run earning above-normal profits
Problem: Assume that firms in the short-run are earning above-normal profits. Explain what will happen to these profits in the long-run for the following markets:(A) Pure monopoly
(B) Oligopoly(C) Monopolistic competition(D) Perfect competition
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You are to be hired as a marketing research consultant ($8000 and five weeks of work with $2000 additional money for expenses) for one of the following businesses. Before you are hired, the business owner wants a "PROPOSAL" of the work you will do
Describe the key elements of a solid emergency response program.
Problem: Assume that firms in the short-run are earning above-normal profits. Explain what will happen to these profits in the long-run for the following markets:
1) If the Smith Company spends $200,000 on advertising, what is the marginal revenue from the extra dollar of advertising? 2) Is $200,000 the optimal amount for the firm to spend on advertising?
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(A) What are the advantages of the Herfindahl index over concentration ratios in measuring the degrees of concentration in an industry? (B) What is the disadvantage of both?
Even if firms in a monopolistically competitive market collude successfully and fix price, economic profit will still be competed away. Explain (include an explanation of economic profit in your explanation).
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