ECON 1B03 Study Guide - Final Guide: Marginal Cost, Deadweight Loss, Marginal Revenue

• School: McMaster University
• Department: Economics
• Course: ECON 1B03
• Professor: Hannah Holmes

Document Summary

A monopoly one seller of a product. The basic reason for monopoly is barriers to entry. 1. a single irm owns a key resource that no other irm can access or has a close substitute for. Rare : the government gives one irm the exclusive right to produce and sell some good. Can give a irm the sale right to sell in a particular market, like cable. A single irms can supply a good or service to an market at a lower cost than could two or more irms. Natural monopoly arises when there are economies of scale over to relevant range of output. Irm operates on the downward sloping point of its atc carve p. 217 : monopoly by good management. Some irms conduct their afairs with the aim of keeping out/driving out competition. Monopoly p and q decision. ppt 10: recall that a perfectly competitive irm is a price taker and faces a horizontal d curve.