Consider the daily market for hot dogs in a small city. Suppose that this market is in long-run competitive equilibrium,

[answerhappygod]

Consider the daily market for hot dogs in a small city. Supposethat this market is in long-run competitive equilibrium, with manyhot dog stands in the city, each one selling the same kind of hotdogs. Therefore, each vendor is a price taker and possesses nomarket power. The following graph shows the demand (D) and supplycurves (S=MC) in the market for hot dogs. Place the black point(plus symbol) on the graph to indicate the market price andquantity that will result from perfect competition. PerfectCompetition PC Outcome 0 40 80 120 160 200 240 280 320 360 400 5.04.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0 PRICE AND COSTS (Dollars perhot dog) QUANTITY (Hot dogs) D S=MC Assume that one of the hot dogvendors successfully lobbies the city council to obtain theexclusive right to sell hot dogs within the city limits. This firmbuys up all the rest of the hot dog vendors in the city andoperates as a monopoly. Assume that this change doesn't affectdemand and that the new monopoly's marginal cost curve correspondsexactly to the supply curve on the previous graph. Under thisassumption, the following graph shows the demand (D), marginalrevenue (MR), and marginal cost (MC) curves for the monopoly firm.Place the black point (plus symbol) on the following graph toindicate the profit-maximizing price and quantity of a monopolist.Monopoly Outcome 0 40 80 120 160 200 240 280 320 360 400 5.0 4.54.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0 PRICE, COSTS, AND REVENUE(Dollars per hot dog) QUANTITY (Hot dogs) D MR MC In the followingtable, enter the price and quantity that would arise in a perfectlycompetitive market; then enter the profit-maximizing price andquantity that would be chosen if a monopolist controlled thismarket. Market Structure Price Quantity (Dollars) (Hot dogs)Perfect Competition Monopoly Given the summary table of the twodifferent market structures, you can infer that, in general, theprice is lower under a, and the quantity is higher under a.