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13 Cards in this Set
- Front
- Back
When there is only one seller in a market
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monopoly
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Monopolist are able to increase its profits by raising prices
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Price makers or market power
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gives an inventor a monopoly on his or her invention
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patent
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A business arrangement under which only one firm is allowed to produce in a particular territory
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exclusive franchise
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If a single firm can produce at a lower average total cost than any combination of two or three or more firms
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natural monopoly
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when a firm sells all of its hot dogs at the same price
Ex.) Coliseum Enterprises |
Single-priced monopoly
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Total Revenue (TR) dived by the number of units sold (Q)
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Average Revenue (AR)
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Price (P) times the number of units sold (Q)
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Total Revenue (TR)
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Is the amount by which society is worse off as a result of having monopoly instead of competition.
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deadweight loss
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When a monopoly is wasteful because it has a reduced incentive to use resources wisely
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X-inefficiency
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a single firm that could produce at lower average total cost than could any combination of two or more smaller firms
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Natural Monopoly
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When different customers are charged different prices for the same good or service.
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Price discrimination
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If a firm were able to charge the exact maximum that each customer is willing to pay.
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Perfect price discrimination
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