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12 Cards in this Set
- Front
- Back
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What is a monopoly? |
A market with a single supplier of a good or service that has no close substitutes and in which barriers to entry prevent competition. |
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What are the three types of barriers to entry? |
Legal, ownership, natural |
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Name 4 legal barriers to entry. |
Public franchise, licence, patent, or copyright. |
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When might a monopoly be able to price discriminate? |
When there is no resale possibility. |
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A monopoly’s demand curve is the ________ demand curve. |
Market |
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A single-price monopoly’s marginal revenue is less than _______. |
Price |
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A monopoly maximizes profit by producing the output at which ______ ______ equals ______ _______ and by charging the ______ ________ that consumers are willing to pay for that output. |
Marginal revenue, marginal cost, maximum price |
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A single-price monopoly charges a higher price and produces smaller quantity than a ________ ________ market. |
Perfectly competitive |
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A single price monopoly restricts output and creates a ______ ______. |
Deadweight loss |
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The total loss that arises from monopoly equals the deadweight loss plus the cost of the resources devoted to ______ _______. |
Rent seeking |
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Price discrimination converts consumer surplus into _____ _____. |
Economic profit |
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What is rent seeking? |
The lobbying for special treatment by the government to create economic profit or to divert consumer surplus or production surplus away from others. |
