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  2. Monopolistic competition - Wikipedia

    en.wikipedia.org/wiki/Monopolistic_competition

    A firm making profits in the short run will nonetheless only break even in the long run because demand will decrease and average total cost will increase, meaning that in the long run, a monopolistically competitive company will make zero economic profit. This illustrates the amount of influence the company has over the market; because of brand ...

  3. Monopoly profit - Wikipedia

    en.wikipedia.org/wiki/Monopoly_profit

    Although a regulated monopoly will not have a monopoly profit that is high as it would be in an unregulated situation, it still can have an economic profit that is still above what a competitive firm has in a truly competitive market. [2] Government regulations of the price the monopoly can charge reduce the monopoly profit, but do not ...

  4. Monopoly price - Wikipedia

    en.wikipedia.org/wiki/Monopoly_price

    When a firm with absolute market power sets the monopoly price, the primary objective is to maximize its own profits by capturing consumer surplus and maximizing its own. A monopoly accomplishes this by setting a price above its marginal cost and producing at a quantity that meets market demand and corresponds to the set price.

  5. Monopoly - Wikipedia

    en.wikipedia.org/wiki/Monopoly

    Monopolistic price: It may be possible for existing firms to ride the existence of abnormal profit by what is called entry limit pricing. This involves deliberately setting a low price and temporarily abandoning profit maximization in order to force new entrants out of the market.

  6. Profit maximization - Wikipedia

    en.wikipedia.org/wiki/Profit_maximization

    The profit maximization issue can also be approached from the input side. That is, what is the profit maximizing usage of the variable input? [13] To maximize profit the firm should increase usage of the input "up to the point where the input's marginal revenue product equals its marginal costs". [14]

  7. Markup rule - Wikipedia

    en.wikipedia.org/wiki/Markup_rule

    Since for a price-setting firm < this means that a firm with market power will charge a price above marginal cost and thus earn a monopoly rent. On the other hand, a competitive firm by definition faces a perfectly elastic demand; hence it has η = 0 {\displaystyle \eta =0} which means that it sets the quantity such that marginal cost equals ...

  8. Perfect competition - Wikipedia

    en.wikipedia.org/wiki/Perfect_competition

    This prevents firms from obtaining any information which would give them a competitive edge. [9] Profit maximization of sellers: Firms sell where the most profit is generated, where marginal costs meet marginal revenue. Well defined property rights: These determine what may be sold, as well as what rights are conferred on the buyer.

  9. Competition (economics) - Wikipedia

    en.wikipedia.org/wiki/Competition_(economics)

    The firm, on the other hand, is aiming to maximize profits acting under the assumption of the criteria for perfect competition. The firm in a perfectly competitive market will operate in two economic time horizons; the short-run and long-run. In the short-run the firm adjusts its quantity produced according to prices and costs.