Market Structures – AP Microeconomics

1. A monopolist maximizes profit where:

P = MC MR = MC MR = ATC P = ATC

2. In perfect competition, in the long run:

Firms earn economic profit Firms earn zero economic profit Firms always shut down Price exceeds MC

3. Deadweight loss occurs in monopoly because:

The firm produces too much The firm produces less than socially optimal Q Price equals marginal cost There are too many firms