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12 Cards in this Set
- Front
- Back
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Name two natural barriers to entry |
Economies of scale High sunk costs |
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3 Artificial Barriers to Entry |
Copyright Health and safety Planning permission |
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3 Pricing Strategies by oligopolies |
Collusion Predatory Pricing Price Leadership |
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Where are S-Normal Profits, Max revenue and productive/ allocative efficiency for a monopolist? |
S-Normal Profits » MC=MR Max revenue» MR intersects x-axis Allocative efficiency» MC= AR Productive efficiency» Lowest point of AC Curve |
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First degree price discrimination |
Charging the highest price a consumer would be willing to pay |
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Second degree price discrimination |
Lower prices charged to people who buy in bigger quantities |
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Third degree price discrimination |
Charging different amounts to different groups of consumers |
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Indicate the deadweight loss traingle for a monopolist |
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How do Monopolies come about? |
Few competitors Barriers to entry Advertising and product differentiation Natural monopolist through economies of scale |
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What is the excess profits for a monopolist? |
The difference between ACm and Pm |
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Why can a monopolist make supernormal profits but firms in a perfectly competitive market cannot? |
For a monopolist, the barriers to entry are total therefore the profits cannot get competed away. |
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What does the deadweight loss represent for a monopolist? |
The potential revenue that the producer isn't earning but that the consumers would be willing to pay |
