(BQ) Part 2 book "Managerial economics and business strategy" has contents: Managing in competitive, monopolistic, and monopolistically competitive markets; basic oligopoly models; the economics of information; advanced topics in business strategy; pricing strategies for firms with market power,.and other contents. | CHAPTER EIGHT 3/10/09 2:24 PM Confirming Pages Managing in Competitive, Monopolistic, and Monopolistically Competitive Markets Learning Objectives After completing this chapter, you will be able to: LO1 Identify the conditions under which a firm operates as perfectly competitive, monopolistically competitive, or a monopoly. LO2 Identify sources of (and strategies for obtaining) monopoly power. LO3 Apply the marginal principle to determine the profit-maximizing price and output. LO4 Show the relationship between the elasticity of demand for a firm’s product and its marginal revenue. LO5 Explain how long-run adjustments impact perfectly competitive, monopoly, and monopolistically competitive firms; discuss the ramifications of each of these market structures on social welfare. LO6 Decide whether a firm making short-run losses should continue to operate or shut down its operations. LO7 Illustrate the relationship between marginal cost, a competitive firm’s short-run supply curve, and the competitive industry supply; explain why supply curves do not exist for firms that have market power. LO8 Calculate the optimal output of a firm that operates two plants and the optimal level of advertising for a firm that enjoys market power. 264 Page 264 HEADLINE McDonald’s New Buzz: Specialty Coffee Recently, McDonald’s unveiled plans to roll out McCafé—a premium line of coffee that includes cappuccino, latte, and iced mocha. About 3,000 of its 14,000 restaurants have already added the new McCafé line of drinks, but a recent downturn in the economy has made it difficult for the remaining franchisees to secure funding for remodeling and other expenses associated with the launch of specialty coffees. The recession left some analysts questioning whether it was the right time for McDonald’s to roll out its line of new specialty drinks. Regardless, why do you think McDonald’s embarked on the program? If the economy rebounds and the remaining .
