ECON 101 Chapter Notes - Chapter 15: Marginal Revenue, Demand Curve, Marginal Cost
22 Sep 2016
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Firm that is a sole seller of a product without close substitutes a. ii. Monopoly resources: owning a resource gives the company monopolistic power. Government-created monopolies: government gives some companies monopolistic power for the benefit of the people a. i. Pharmaceutical companies discovers new drugs are allowed monopolistic power to encourage them to keep researching. Water monopoly can build a system of pipes (one fixed cost) b. ii. However, if two or more compete, each would have to pay the. 15. 2 how monopolies make production and pricing decisions same fixed cost making it more costly: monopoly versus competition a, competitive firm"s demand curve horizontal because it takes price of the market b. i. Market makes the price: monopolist"s demand curve downward sloped because it takes the market demand curve c. i. A monopoly"s revenue: marginal revenue is always less than the price of the good a. i.
