Only one seller of a product. Firm and industry are the same.
Barriers to Entry in a monopoly
Legal barriers, Economies of scale, Control of important inputs
When a single firm can supply a good or service to an entire market at a smaller cost than could two or more firms.
A ______ arises when there are economies of scale over the relevant range of output.
Economies of scale provide a cost _________ throughout the relevant output range
Faces a downward-sloping demand curve. • Reduces price to increase sales
In a monopoly the firm's demand curve is the ______ as market demand curve
If monopolist expands output, price will ______ .
The marginal revenue curve for a monopolist lies ______ the demand curve.
In a monopoly, marginal revenue is always _____ than price of the goods
In a monopoly, additional revenue from new unit sold is offset by lower ______ on all previous units
When a monopoly drops the price to sell one more unit, the revenue received from previously sold units _________ .
In a monopoly, below the midpoint, demand is ________ .
In a monopoly, above the midpoint, demand is ________ .
MR = MC
In a monopoly, equilibrium output is at the point where ________.
For a monopoly firm, price exceeds marginal cost
If TR > TC (the price exceeds average total cost), the monopolist is generating economic _______ .
Barriers to Entry
In a monopoly, profits can persist in the long run because of ______ .
If TR < TC (the price is less than average total cost), the monopolist is generating economic _______ .
A monopolist will incur a loss if there is insufficient ______ to cover costs
The fall in price when a patent expires shows the effect of
Lack of ________ hinders technological advances
When a monopolist produces an output where the price is greater than its cost
When a monopoly is not producing enough from society's perspective
Prevent monopoly. Promote competition. Enhance economic efficiency.
Approaches to dealing with monopolies
Anti-combine Laws and government regulation
The business practice of selling the same good at different prices to different customers, even though the costs for producing for the two customers are the same.
Perfect price discrimination
Refers to the situation when the monopolist knows exactly the willingness to pay of each customer and can charge each customer a different price
Conditions for Price Discrimination
Monopoly power, Market segregation, No resale