Suppose a Perfectly Competitive Market Results in a Long-Run Equilibrium

question 46

Multiple Choice

Suppose a perfectly competitive market results in a long-run equilibrium price of $8 and quantity of 500.  If this same market were a monopoly, which of the following price and quantity combinations would be the most likely?

• A) Price: $10, Quantity: 350
• B) Price: $8, Quantity: 500
• C) Price: $6, Quantity: 650
• D) Price will equal marginal revenue and quantity will be found where marginal revenue equals marginal cost.

---

Definitions:

Forecasting

The process of making predictions based on past and present data and analysis of trends, often used in planning inventory, sales, and other business operations.

Systematic Component

The part of a model or data that can be directly attributed to identifiable, potentially predictable, factors rather than random variation.

Seasonality

The periodic fluctuations in demand or activity levels experienced by businesses, often influenced by the time of year or season.

Adaptive Forecasting

A method in forecasting that adjusts its parameters and methods based on real-time feedback and data to improve future forecasts.