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ECON 208 (210)
Lecture

# Chapter 10.docx

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School
Department
Economics (Arts)
Course
ECON 208
Professor
Sebastien Forte
Semester
Summer

Description
Chapter 10: Monopolys, Cartels, and Price Discrimination  For monopolists, marginal revenue is less than price  If the monopolist produces too much, he would need to charge a lower price for Qd to match Qs  A monopolist faces a downward sloping market demand curve (different from in a perfectly competitive market where they faced a horizontal demand curve)  If the monopolist charges the same price for all units sold, its total revenue (TR) is: TR = p x Q  ^Regularily is is (TR = p x q). This is a capital Q because he has to think about the whole market quantity, not just his own (market quantity is his own)  Marginal Revenue (MR) is the revenue resulting from the sale of an additional unit of production: MR = ΔTR/ΔQ  The monopolist must reduce the price to increase its sales- therefore the MR curve is below the demand curve  MR curve- same intercept and twice the slope of the demand curve  Profit maximizing point is lower than minimum average cost po
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