Match the characteristic described with the market or markets it applies to. Each characteristic can have multiple answers and each market type can be used multiple times. can earn economic profit in the long run produces at lowest possible average cost in the long run the pricing choices of one firm have a dramatic effect onother firms in the market faces a downward sloping demand curve usually faces entry from new firms is typically protected by barriers to market entry

1. Can earn economic profit in the long run - MONOPOLY AND OLIGOPOLY

Monopolies and Oligopolies both have less competition in their market types which means that they can make economic profit in the long run.

2. Produces at lowest possible average cost in the long run - PERFECT COMPETITON

With so many firms involved in the market in the long run, firms come up with cost cutting strategies to enable them stay in business.

3. The pricing choices of one firm have a dramatic effect on other firms in the market - OLIGOPOLY

As there are few firms in such a market, the prices that one firm has can influence the choices of other firms. If one firm increases prices, the others could reduce prices to capture market share or collude and increase their own prices as well.

4. Faces a downward sloping demand curve - MONOPOLY, OLIGOPOLY, MONOPOLISTIC COMPETITION

All three of these markets face a downward sloping demand curve because they have to decrease their prices to sell more goods.

5. Usually faces entry from new firms - PERFECT COMPETITON and MONOPOLISTIC COMPETITION

Both these markets se firms entering and exiting because there are no barriers to entry.

6. Is typically protected by barriers to market entry - MONOPOLY and OLIGOPOLY

These two have barriers to entry that restrict the number of firms in the market.

a. $48.75

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