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10 Cards in this Set
- Front
- Back
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What is a Monopoly. Describe the monopoly market structure in terms of the number of producers, barriers to entry and the type of product.
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A monopoly is a single firm that produces the entire market supply of a good and there is a very high barrier to entry.
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What is market power?
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The ability for a firm to alter the price of a product.
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What is the degree of the market power under a monopoly?
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In a monopoly the 1 firm sets the price of the market.
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What is the degree of competition under a monopoly?
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In a monopoly there is no competition.
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Why is there no distinction between market demand and the firms demand under a monopoly?
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1 industry = 1 firm
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How to monopolies gain market power?
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It doesn't have to gain it by being a monopoly it just has it.
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How does a monopoly determine a level of output?
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Profit Maximization MR = MC
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Explain why Price does not equal Marginal Revenue in a Monopoly?
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Because in a monopoly the demand curve is downward sloping and MR is always less then the price.
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What is price discrimination?
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It is when a monopolistic firm sells their products at a different price to different consumers.
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What are the major anti-trust laws in the US?
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1. The Sherman Act -prevents mergers, contracts, or acquisitions that threaten to monopolize a market
2. The Clayton Act 3. Federal Trade commission Act. |
