ECN 104 Lecture Notes - Deadweight Loss, Competitive Equilibrium, Price Discrimination

81 views4 pages

jadegnat800

4 Dec 2011

School

Ryerson University

Department

Economics

Course

ECN 104

Professor

Tsogbadral Galaabaatar

For unlimited access to Class Notes, a Class+ subscription is required.

Document Summary

A monopoly firm has market power, the ability to influence the market price of the produce it sells. A competitive firm has no market power: the main cause of monopolies is barriers to entry other firms, three sources of barriers to entry: cannot enter the market. A single firm owns a key resource (e. g. , debeers owns most of the world"s diamond mines) The government gives a single firm the exclusive right to produce the good. (e. g. , patents, copyright laws) The profit-maximizing q is where mr = mc: 2. Find p from the demand curve at this q: as with a competitive firm, the monopolist"s profit equals (p atc) x, the monopolist"s profit. Q: a monopoly does not have a supply curve, a competitive firm. Has a supply curve that shows how its q depends on p: a monopoly firm. Q does not depend on p, rather q and p are jointly determined by mc, mr, and the demand curve.

Related Questions

1. How is a monopolistically competitive market similar to a perfectly competitive market?

A. There are no restrictions on the entry of new firms.

B. Both have differentiated products with close substitutes.

C. Producers with market power set their own prices.

D. Both have homogeneous products with no close substitutes.

2. Which of the following common features do monopolistically competitive markets, and monopolies share?

A. Barriers restrict new firms from entering.

B. Firms face downward-sloping demand curves.

C. Consumers with market power set prices.

D. Producers with no market power set their own prices.

ceruleancicada74

1. Which characteristic led to Microsoft exercising monopoly power?

A.copyright protection for the Windows operating system

B .no close substitutes

C.economies of scale

D.government franchise

2. The goal of antitrust law is to:

A. prevent monopolies and monopoly power from arising.

B.protect monopolies from the competition.

C. make sure consumers pay high prices.

D. preserve allocative inefficiencies of monopolies.

3. Which of the following is not a characteristic of a monopoly?

A. The market has just one seller.

B.There exist significant barriers to entry.

C. Substitutes for the monopolist's products are available to buyers.

D. No close substitutes exist for the monopolist's products.

4. A constantly declining long-run average cost curve is a characteristic of what type of industrial structure:

A. Monopoly

B. Natural monopoly

C. Oligopoly

D. Perfect competition

5. An industry that has large economies of scale operates most efficiently as a(n):

	A.competitive industry.
	B.monopoly
	C.regulated natural monopoly.
	D.anarchic industry.

goldcattle908

25. One difference between perfect competition and monopolistic competition is A) firms in a perfectly competitive market produce similar but slightly different products. B) in perfect competition, the product produced has no close substitutes. C) monopolistic competition has barriers to entry, whereas perfect competition has none. D) a small number of firms compete in a monopolistically competitive market and a large number of firms compete in a perfectly competitive market. E) firms in monopolistic competition have some degree of market power.

ECN 104 Lecture Notes - Deadweight Loss, Competitive Equilibrium, Price Discrimination

Document Summary

Get access

Related Documents

ECN 104 Chapter Notes - Chapter 15: Deadweight Loss, Price Discrimination, Competitive Equilibrium

ECN 104 Chapter Notes - Chapter 15: Natural Monopoly, Demand Curve, Market Power

ECN 104 Lecture Notes - Lecture 10: Demand Curve, Natural Monopoly, Deadweight Loss

Related Questions