Use complete sentences with complete thoughts in Standard English. Please proofread your responses carefully. Remember to use in-text citations in addition to the references so I know from which source you got specific information. DO NOT COPY AND PASTE DIRECTLY FROM WEBSITES. Your responses should be in your own words to demonstrate your understanding of the material. The exception is stating definitions from the book (or SLU website). However, these definitions must have quotation marks with proper citation. You must have no more than 3 quotations in your response (one for each part)
In comparing a perfectly competitive market and a monopoly, please answer each of the following questions thoroughly, based on your readings and practice, for full credit. Quality outside research can only help your grade. Please do not create your responses from the information in the text only. The use of outside references, as well as the textbook, must be cited and referenced. This discussion question has 3 parts. All parts must be answered for full credit.
Address the graph explicitly in your answer. Part of this question is demonstrating your ability to analyze the graph. (see below)
(Put in at least two paragraphs):
a) Compare the competitive price charged and quantity produced under perfect competition and monopoly. Other than identifying the presence of only one producer under monopoly, why do we tend to see this differential?
b) Does a monopolist achieve efficiency in its production (that is, does it produce where MR = MC)? Will society face a welfare loss in a monopolistic market?
c) Applying Saint Leo’s Core Values of responsible stewardship to this question, would you consider that there is never good cause to allow monopolies to operate? Please take into consideration your answer to Part (b).
Your responses to (c) must indicate that an objective, educated opinion has been reached.
NOTE: Response must be in your own words with proper citations for all sources used (including the textbook).
READ BELOW HINTS:
The first part asked you to look at the differences between perfect competition and monopoly.
In Part A, be sure to identify the price and quantity for both perfect competition and monopoly from the graph to help support your position about the difference between the market structures. Also consider the differences in the characteristics in addition to the number of firms.
In Part B, be sure to identify numbers from the graph to support your position about monopoly, efficiency, and welfare loss. Pay close attention to the question. Note that is asks specifically about production efficiency, which is different than complete economic efficiency.
In Part C, be sure to state/summarize responsible stewardship and apply to the existence of monopoly. Consider whether all monopolies are “bad.”
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