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Some firms with monopoly power are more focused on market share, size and influence in the economy. This is particularly true if there is a tendency for ownership (stockholders) and control (managers) to be separated. These firms sometimes are willing to operate with normal or near normal profits and they price accordingly. Starting from a standard monopoly profits maximizing model, SKETCH A GRAPH showing how the monopoly might price and how much it would produce if it sought size and only normal profit. Management salaries are included in the ATC function so the decision makers usually are not giving up much in this strategy. Is this price similar to the perfect competitive model?

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M91240368

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