MAE101 Lecture Notes - Lecture 9: Metro Trains Melbourne, Social Inequality, Television Licensing In The United Kingdom
1 Aug 2018
School
Department
Course
Professor
Document Summary
Very difficult or impossible to enter the market. Dorevitch pathology: firm is the sole seller of its product. It is protected from competition by a barrier preventing entry of new firms. While a competitive firm is a price taker, a monopoly is a price maker because it has the market power to influence price. Monopolies arise because there are barriers to entry meaning other firms cannot enter the market to compete. When a single firms owns a key resource. When the government gives a single firm the. Debeers owns most of the worlds diamond mines. Natural monopolies exclusive right to produce a good or service. Leads to higher prices than under perfect competition. When a single frim can supply a good at a lower atc than other firms. 1000 homes need electricity cheaper if 1 company provides all 1000 than 2 companies providing 500 each. When your atc curve continually declines you have a natural monopoly.
