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Answer on Microeconomics Question for neha

Question #26700
Write briefly that firm’s profit maximisation under different markets (perfect competitive, monopoly, monopolistic and oligopolistic) is dominated by the revenue conditions not by the cost conditions
Expert's answer
Perfect competitive market:
The price is set by the market and producers are price takers. The amount of output
is determined in the point, where MR = MC = Pe, so the optimal amount of output
doesn't depend on the producers wants. They can only cut costs to increase
The price is set by the monopolist and is higher, than equilibrium price. So,
he produce less and sets the price higher. It allows to have higher revenue and
profits without cutting the costs.
Monopolistic competition:
Is similar to the monopoly, but there is non-price competition between the
producers, they use product differentiation not to have the direct competitors.
It allows them to set the prices like the monopolists.
The prices and revenues depend on the interaction of the several producers, there
are different strategies for them, that very according to the features of the
particular market.

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