Answer to Question #259321 in Microeconomics for Nish

Question

Why can a monopolist incur profit in long run and increase it by segmenting its market by charging different prices in each segment but a perfect competitor fails to do the same explain with the help of graphs and suggest two measures to regulate exploitation by a monopolist

Answer 1

In the long run monopolies can earn profits since there are barriers to market entry. However, in a perfect competitor both profits and losses cannot be achieved because many firms are manufacturing many divisible, homogeneous commodities.

Perfect Competitor

Monopolies