ECN 101 Lecture Notes - Lecture 11: Natural Monopoly, Public Utility, Demand Curve
Document Summary
Monopoly exists when a single firm is the sole producer of a product o service for which there are no close substitutes. The monopolist confronts the usual downsloping product demand curve. It can change its product price by changing the quantity of the product it produces: blocked entry- monopolist has no competitors because certain barriers keep potential competitors from entering the industry. Those barriers may be economic, technological, legal, or of some other type, but entry is totally blocked: non price competition- product produced by a monopolist may be either standardized or differentiated. Monopolists that have standardized products engage mainly in public relations advertising, whereas those with differentiated products sometimes advertise thei(cid:396) p(cid:396)odu(cid:272)t"s att(cid:396)i(cid:271)utes. In many cities, gov. - owned or government-regulated public utilities-natural gas and electric companies, the water company, the cable tv company, and the local telephone company may be monopolies: public utility companies, natural gas, electric, water, near monopolies. Intel, micro processor: wham-o produces frisbees, professional sports teams.