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20 Cards in this Set
- Front
- Back
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Single seller
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When a single firm is the sole producer of a good
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No close substitutes
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Product is unique and there are no close substitution
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Price maker
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Controls the quatity supplied and has control over price. ONLY a pure monopoly
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Blocked entry
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no competition, barriers may be economic, technological, legal
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Non price competation
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standardized or differentiated product.
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Barriers to entry
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factors that prohibit firms from entering industries
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Economies of scale
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Declining average total cost with added firm size
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Pure Monopoly
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Sole producer of a product in an industry.
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Charaterists of monopoly
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Single seller
No close substitutes Price maker Blocked entry Nonprice competition |
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What is nonprice competiton
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No competation over price, but through advertising
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Barriers to entry
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Economies of scale
Patents Licenses Ownership of resources Other strategic barriers to entry |
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Monopolistic demand curve is...
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Downsloping
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Monopolist doesn't charge the highest price, instead
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charges price that beings it the greatest total profit
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Monopolies never experience productive or allocative effeciency
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(remember it)
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Simultaneous Consumption
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Product's ability to satisfy a large number of consumers at the same time.
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Network effect
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Situation where the value of a product rises when more people use it.
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x-ineffiiency
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when firms produces output at a higher cost than it is necessary to produce
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Rent-seeking behavior
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Where firm will try to transfer income to itself at soemone else's espense.
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Socially optimal price
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P=MC
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Fair-return price
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P=ATC
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