Unit 5 Assignment: Perfect Competition Profit Maximization and Monopoly Merger
Guidelines
In this assignment, you will calculate total cost, total revenue, and total profit/loss. Based on
the computed results, you will determine the optimal quantity of output that maximizes profit
under a perfectly competitive market. Moreover, you will evaluate the antitrust laws and
merger guidelines based on market shares of firms to prevent a monopoly and promote
competition in the economy.
Instructions: This assignment requires a combination of short paragraph answers and
computations. You are required to follow proper APA format. Read the Criteria section
below for more information before you begin this assignment.
1. How does the demand curve faced by a perfectly competitive firm differ from the
market demand curve in a perfectly competitive market? Explain.
2. How does ase of entry&or a monopoly differ from that for a perfectly competitive
firm? How does this difference impact efficiency under each market structure?
Explain.
3. The following table provides market share information about the soft-drink industry.
Review antitrust laws and the merger guidelines under Chapter 15: onopoly and
Antitrust Policy!nd conduct your own research on U.S. antitrust laws in the PG
Library or on the Internet to answer the following questions.
a. Compute the Herfindahl)rschman Index (HHI) market concentration rules
that guide mergers between companies to prevent monopoly creation and to
promote competition among firms.
i.
Based on the market shares of the companies in the table, the merger
of which companies will be highly concentrated?
ii.
What ethical rules will be affected based on U.S. antitrust laws and
merger guidelines in regard to a highly concentrated market?
b. Do you think the Department of Justice and the Federal Trade Commission
would approve a merger between any two of the first three companies listed
in the table based on U.S. merger guidelines and antitrust laws? Explain.
c. Do you think this market has barriers to entry? If yes, what might be the
market barriers?
Criteria
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This assignment should be completed in Microsoft Word.
It should be written in Standard English and demonstrate exceptional content,
organization, style, and grammar and mechanics.
Respond to the questions in a thorough manner, providing specific examples where
asked.
Add references in APA format in a separate page at the end of your paper.
Your sources and content should follow proper APA format (though a title page is not
required). Review the APA format information found in the Writing Resources,
accessed through the Academic Success Center within the Academic Tools area of
the course.
Review the grading rubric to ensure all points have been captured in the paper.

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