Question 1: In model where a single firm controls the entire market, the market demand curve is what the monopolist faces. How is this assumption different than in perfect competition? Question 2: Using a graph of a monopolist, use three graphs to illustrate short run profit maximization. Draw a market demand curve, a monopolist marginal revenue curve and a marginal cost curve. Show what quantity a monopolist would produce. Question 3: In a perfectly competitive market, firms will be forced to charge a price equal to its marginal cost. (why?). But in a monopoly this is not the case. Price is always higher than marginal cost. How does the profit maximizing outcome in a monopoly compare to the profit maximizing outcome in perfect competition? Compare price and quantity outcomes. Question 4: Looking at the two models in this imodule, what do the models say would be the effect of an industry becoming monopolized? How would efficiency be affected?