Economics 1021A/B Lecture Notes - Lecture 22: Demand Curve, Natural Monopoly, Marginal Revenue

• School: Western University
• Department: Economics
• Course: Economics 1021A/B
• Professor: Jeannie Ann Shearer

Document Summary

Monopoly review: you know it is a natural monopoly if there is a downward sloping lrac curve along the entire run of the demand curve. In a legal monopoly, the government gets involved and passes legislation so that a firm is protected from competition. Just like in a perfectly competitive market, there is a total revenue curve: but in a perfectly competitive market, the tr curve is a straight line. There are some monopolies that charge different prices to different groups of people (or if you buy in bulk), but you don"t have to know that for this course (we are dealing with a single-price monopoly. ) Perfect competition: when you produce at a point where marginal social cost = marginal social benefit, you have maximized consumer surplus and producer surplus. Monopoly: inefficient because it creates a deadweight loss. Example: suppose this is your monopoly and it is unregulated.