MGEA02H3 Chapter : Week 8 study guide

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MGEA02H3 Full Course Notes
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MGEA02H3 Full Course Notes
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Chapter 10 monopoly, cartels, and price discrimination notes. N monopoly a market containing a single firm. N monopolist a firm that is the only seller in a market. N monopolist"s marginal revenue is less than price at which it sells its output; thus monopolist"s mr curve is below demand curve. N monopoly is a market structure in which an entire industry is supplied by a single firm. The monopolist"s own demand curve is identical to the market demand curve for the product. The market demand curve is the monopolist"s average revenue curve, and its marginal revenue curve always lies below its demand curve. N a single-price monopolist is maximizing its profits when its marginal revenue is equal to marginal costs. Since marginal costs are positive, profit maximization means that marginal revenue is positive. Thus, in turn, elasticity of demand is greater than 1 at the monopolist"s price-maximizing level of output.

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