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12 Cards in this Set
- Front
- Back
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A _____________is an industry in which there is only one producer |
monopoly |
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Amonopolist has ____________market power; it ___________ the price |
significant can dictate |
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tosell more the monopolist must lower the price, so _____ will always be less thanprice |
MR |
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How do you achieve profit maximization in a monopoly? |
•Find where the MR curve intersects the MCcurve •Drop down to the output axis to find theprofit-maximizing quantity. •Go up to the demand curve and then leftto the price axis to find the profit-maximizing price. |
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•Amonopoly firm has _______ market power and confronts the downward-sloping market demand curve for its own output. |
total |
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•Inimperfect competition (including monopoly), MR _________________ price. |
no longer equals |
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•If _____________, produce this profit-maximizing output. (MONOPOLY) |
MR=MC |
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A monopoly must have a _____________ to entry. |
total barrier |
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•Amonopolist receives larger profits than a comparable competitive industry by _______________________________. |
reducing quantity and pushing prices up. |
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What are some barriers that enable a monopoly? |
•Patents. •Exclusivefranchises. •Politicalappointment. •Controlof key inputs. •Lawsuits(sue the opposition out of existence) •Acquisition. •Economiesof scale. |
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What are some "pros" of monopolies? |
•Greaterability to pursue research and development (R&D).•Tremendousincentive for invention and innovation.•Largecompanies can produce more efficiently.•Theyhave to worry about potential competition and so will act accordingly. |
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animperfectly competitive industry subject to potential entry if price or profitsincrease
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Contestable market |
