TOPICS:
What are
Monopolies?
Monopoly Output and Price in the
Short-Run
OUTCOMES
List the five
characteristics of pure monopoly.
List and give examples of the four
barriers to entry.
Describe the demand curve facing a
pure monopoly and how it differs from that facing a firm
in a purely competitive market.
Why is the demand curve for a
monopoly downward sloping?
Compute marginal revenue when
given a monopoly demand schedule.
Explain why the marginal revenue
is equal to the price in pure competition but marginal
revenue is less than price in monopoly.
- Why is the MR curve
below the demand curve?
- Why is the extra revenue that
a monopoly receives from selling one more unit (MR)
less than the price that they charge for that unit
(D)?
Determine the price and output
level the monopoly will choose given demand and cost
information in both table and graphic form.
Draw the short run equilibrium
graphs for a pure monopoly that (a) maximizes profit, (b)
minimizes loss, and (c) shuts down.
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