ECON 1000 Study Guide - Final Guide: De Beers, Competitive Equilibrium, Thought Experiment

• School: York University
• Department: Economics
• Course: ECON 1000
• Professor: Ardeshir Noordeh

Document Summary

Monopoly and how it arises: a monopoly is a market, that produces a good or service for which no close substitute exists. In which there is one supplier that is protected from competition by a barrier preventing the entry of new firms: how monopoly arises, a monopoly has two key features: If a good has a close substitute, even if it is produced by only one firm, that firm effectively faces competition from the producers of the substitute. Monopoly sells a good that has no close substitutes: barriers to entry, a constraint that protects a firm from potential competitors is called barriers to entry, three types of barriers to entry are. Many firms price discriminate, but not all of them are monopoly firms. That is, mr < p: figure 13. 2 illustrates the relationship between price and marginal revenue and derives the marginal revenue curve, suppose the monopoly sets a price of and sells 2 units.