Yr 2 Imperfect competition

Question 1

What are the assumptions for imperfect competition?

Answer 1

Few buyers or sellers
differentiated goods
firms are price makers, they have that power
high barriers to entry
imperfect competition

Question 2

Diagrams in imperfect competition, for AR, MR and TR

Answer 2

AR will be downward sloping, MR is the output for one extra product so gradient will be double the steepness of AR, and when it hits zero, TR will fall, but initially, it rises