ECN 104 Lecture Notes - Lecture 9: Monopolistic Competition, Via Rail, Enbridge

• School: Ryerson University
• Department: Economics
• Course: ECN 104
• Professor: German Pupato

Document Summary

System of market structure is based on the number of producers in the market (one, few, many) and how differentiated the products are/ identical. The price taking firms optimal output rule is to produce the output level at which the marginal cost of the last unit produced is equal to the market price. A monopolist is the sole supplier of its good so its curve is downward sloping. Marginal cost is compared to marginal revenue and if marginal revenue exceeds marginal cost it increases profit by producing more, if its vice versa then it decreased production to increase profit.