ECON 100A Study Guide - Final Guide: Marginal Cost, W. M. Keck Observatory, Negative Number
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10. 4: social costs of monopoly power 8. 10. 7 limiting market power: the anti-trust laws 11. Chapter 11: pricing with market power 13. 11. 3 intertemporal price discrimination and peak-load pricing 14. Chapter 14: markets for factor inputs 16. 14. 2 equilibrium in a competitive factor market 19. Market power: ability of seller or buyer to affect price of good. Pure monopoly: in many markets, only a few firms compete with each other. Market power: the ability of a seller or buyer to affect the price of a good. We then set marginal revenue equal to marginal cost: Mc = p + p(1/ ed) = (p mc)/p = -1/ ed. In order to maximize profit, the firm will produce at the point where the elasticity of demand is exactly -1. Changes in output with no change in price. Changes in both price and output (common) Market with several firms: suppose that there are 4 firms producing toothbrushes, market demand curve q =
