ECON 101 Chapter Notes - Chapter 10: Takers, Perfect Competition, Transact
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ECON 101 Full Course Notes
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Short run average cost curve originates from production not market structure: curve the same for monopoly as perfect competition. Demand curve monopolies face is the original demand curve (of a particular product: total quantity consumers would like to purchase at a given price. Monopolies face a negatively sloped demand curve (unlike a perfectly competitive firm) Monopolists selling all units for the same price. Average revenue for all products sold at the same price. Demand curve is also the monopolist"s average revenue curve. Revenue resulting from the sale of one more unit of a product. A firm must reduce price on all units in order to sell one more unit: marginal revenue is equal to price minus revenue lost. Monopolist"s marginal revenue is less than the price at which it sells its output: marginal revenue curve is below its demand curve. Marginal revenue is always less than price for a monopolist.