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7 Cards in this Set

  • Front
  • Back
What is a monopoly
A market structure in which there is a single supplier of a product
Monopoly firm (monopolist)
a single supplier of a product for which there are no close substitutes
barrier to entry
anything that mipedes the ability of firms to begin a new business in an industry in which existing firms are earning positive economic profits
Three general classes of barriers to entry
1. Natural barriers, such as economies of scale
2. Actions on the part of firms that create barriers to entry
3. Governmentally created barriers
price discrimination
charging different customers at different prices for the same product
Necessary Conditions for Price Discrimination
1. The firm cannot be a price taker (PERFECT COMPETITIOR)
2. The firm must be able to separate customers according to price elasticities of demand
3. The firm must be able to prevent resale of the product
Deadweight loss
the reduction of consumer surplus without a corresponding increase in profit when a perfectly competitive firm is monopolized