The Tendency of the Firm in a Monopolistic Market Essay

The Tendency of the Firm in a Monopolistic Market - Essay Example These differences between perfect competition and monopolistic competition have social welfare implications. In perfect competition, marginal revenue is the same as price and this reflects the optimum utility of goods as the price is also equal to marginal cost. Supply also meets the demand at the most efficient level. This is illustrated in Figure 1 where supply and demand achieved equilibrium. The case is different in a monopolistic competition where there are few or no competition. The tendency of the firm in a monopolistic market is to restrict production as can be shown in Figure 1 to drive prices up as represented by P1. The market then becomes inefficient because firms are not producing at a minimum cost where price is much higher than the cost of production. This has an implication in social welfare as inefficiency would mean requiring more resources to achieve the same utility of good thereby increasing the social cost. This is not the case in a perfect competition where mar ginal revenue is the same as price. In the diagram in Figure 2, a competitive market achieves an equilibrium where demand is met with supply (MC and AR intersect). It meant that the social service can be had at its cost and is, therefore, the most optimum level where the needed service is appropriately supplied without waste. Thus comparing perfect competition with a monopolistic market, price in the monopolistic market is higher as shown in P1 compared to Price of perfect competition in P2. Production is also inefficient in the monopolistic market as shown by Q1 as it is deliberately restricted to drive the price or P1.

EPIDEMIOLOGY and BIOSTATISTICS Essay Example | Topics and Well Written Essays - 3250 words

EPIDEMIOLOGY and BIOSTATISTICS - Essay Example Specific Tests are required more when a rare disease in question. However for such a communicable disease, early detection is a must and hence the more sensitive test i.e Test B should be chosen. 2. Physicians practising in the general community often find that on the average chronic debilitating conditions such as multiple sclerosis or connective tissue diseases lead to less disability and fewer complications than they were led to expect from reading reports in medical literature on the natural history of these conditions. Why do you think this is the case? Ans 2. The chronic debilitating conditions mentioned in these diseases is a subjective and dependant variable concern. Multiple factors affect the incidence and complexity of the above mentioned diseases. Or it could be the case that, Medical awareness in the community is high so these conditions get cured before reaching an advance stage. Thus all this could contribute to the fact that these chronic conditions seem to occur with less disability and fewer complications than they were led to expect from reading reports in medical literature on the natural history of these conditions. 3. Surgeons at hospital A report that mortality rate at the end of one year follow up period after a coronary by-pass operation is 15%. At hospital B the surgeons report a 1-year mortality rate of only 8% after the same procedure. What would you find out before concluding that surgeons at hospital B perform the operation with greater skill? Referral Bias is an important factor to be considered while determining the skill in the above case. A might be getting more complicated disease cases. Even for the same disease, it might get a disease in a more advanced stage. Thus even for the same number of cases, the mortality rate of the two hospitals is not comparable. 4. The following table shows data from a