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Monopoly

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Monopoly

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• Perfect Competition\n\nIn this video we&amp;#x2019;re going to talk about Perfect Competition.\n\nFirst we&amp;#x2019;ll draw and label our price-quantity graph.\n\nThen we&amp;#x2019;ll draw the demand curve.\n\nRemember that under perfect competition there is one price level for all individual sellers. This means the demand curve is flat. This also means the marginal revenue curve is the same as the demand curve. So price and demand and marginal revenue are all on the same line.\n\nSo the first question we want to answer is &amp;#x201C;At what level should we produce to maximize profits?&amp;#x201D; We always answer this question with the equation MR=MC.\nSo we need to see a marginal cost curve. This curve is a &amp;#x201C;U-shape&amp;#x201D; to indicate that costs typically tend to decline and then increase. \n\nNow that we have a MR and a MC curve we can pin-point the intersection. \n\nThe next step is to draw a vertical line down to the Quantity axis. This line will point to the quantity we should produce to maximize profits. \n\nWe can then calculate Total Revenue. This is P times Q, or this area.\n\nThe next step is to calculate Total Costs. Total Costs are calculated as ATC x Q. We need the ATC curve to do this. Once we know the ATC then we pin-point the intersection of the ATC curve and the vertical line we drew. Then we daw a horizontal line from this point over to the price axis. The area below this line represents our total costs. \n\nNow we can calculate profits. The equation is TR -TC, or another way is (Price-ATC) x Q. \n\nLet&amp;#x2019;s quickly review. We start with a flat demand curve which is also our marginal revenue curve. We then add a marginal cost curve. Using MR=MR we pinpoint the profit maximizing location and draw a line down to quantity. This are is total revenue. We then look at the Average Total Cost curve and pinpoint where it crosses our line and then draw a horizontal line. The area below this line is Total Cost and the area above is profit. \n\nLets look at another example.\n\nWe start with a flat demand curve which is also our marginal revenue curve. We then add a marginal cost curve. Using MR=MR we pinpoint the profit maximizing location and draw a line down to quantity. This are is total revenue. In this case the ATC curve is above the price line. If this is the case we will be looking for the location that minimizes losses. We pinpoint where ATC crosses our line and then draw a horizontal line. The area is Total Cost. Since Total Costs are larger than Total Revenue, this area represents our losses. Remember that using MC=MR we can figure out where our losses are minimized. \n\nAlright, now you know how to analyze Perfect Competition. \n\nDon&amp;#x2019;t forget you can rewind this video to make sure you understand how the graph works.\n
• Perfect Competition\n\nIn this video we&amp;#x2019;re going to talk about Perfect Competition.\n\nFirst we&amp;#x2019;ll draw and label our price-quantity graph.\n\nThen we&amp;#x2019;ll draw the demand curve.\n\nRemember that under perfect competition there is one price level for all individual sellers. This means the demand curve is flat. This also means the marginal revenue curve is the same as the demand curve. So price and demand and marginal revenue are all on the same line.\n\nSo the first question we want to answer is &amp;#x201C;At what level should we produce to maximize profits?&amp;#x201D; We always answer this question with the equation MR=MC.\nSo we need to see a marginal cost curve. This curve is a &amp;#x201C;U-shape&amp;#x201D; to indicate that costs typically tend to decline and then increase. \n\nNow that we have a MR and a MC curve we can pin-point the intersection. \n\nThe next step is to draw a vertical line down to the Quantity axis. This line will point to the quantity we should produce to maximize profits. \n\nWe can then calculate Total Revenue. This is P times Q, or this area.\n\nThe next step is to calculate Total Costs. Total Costs are calculated as ATC x Q. We need the ATC curve to do this. Once we know the ATC then we pin-point the intersection of the ATC curve and the vertical line we drew. Then we daw a horizontal line from this point over to the price axis. The area below this line represents our total costs. \n\nNow we can calculate profits. The equation is TR -TC, or another way is (Price-ATC) x Q. \n\nLet&amp;#x2019;s quickly review. We start with a flat demand curve which is also our marginal revenue curve. We then add a marginal cost curve. Using MR=MR we pinpoint the profit maximizing location and draw a line down to quantity. This are is total revenue. We then look at the Average Total Cost curve and pinpoint where it crosses our line and then draw a horizontal line. The area below this line is Total Cost and the area above is profit. \n\nLets look at another example.\n\nWe start with a flat demand curve which is also our marginal revenue curve. We then add a marginal cost curve. Using MR=MR we pinpoint the profit maximizing location and draw a line down to quantity. This are is total revenue. In this case the ATC curve is above the price line. If this is the case we will be looking for the location that minimizes losses. We pinpoint where ATC crosses our line and then draw a horizontal line. The area is Total Cost. Since Total Costs are larger than Total Revenue, this area represents our losses. Remember that using MC=MR we can figure out where our losses are minimized. \n\nAlright, now you know how to analyze Perfect Competition. \n\nDon&amp;#x2019;t forget you can rewind this video to make sure you understand how the graph works.\n
• Perfect Competition\n\nIn this video we&amp;#x2019;re going to talk about Perfect Competition.\n\nFirst we&amp;#x2019;ll draw and label our price-quantity graph.\n\nThen we&amp;#x2019;ll draw the demand curve.\n\nRemember that under perfect competition there is one price level for all individual sellers. This means the demand curve is flat. This also means the marginal revenue curve is the same as the demand curve. So price and demand and marginal revenue are all on the same line.\n\nSo the first question we want to answer is &amp;#x201C;At what level should we produce to maximize profits?&amp;#x201D; We always answer this question with the equation MR=MC.\nSo we need to see a marginal cost curve. This curve is a &amp;#x201C;U-shape&amp;#x201D; to indicate that costs typically tend to decline and then increase. \n\nNow that we have a MR and a MC curve we can pin-point the intersection. \n\nThe next step is to draw a vertical line down to the Quantity axis. This line will point to the quantity we should produce to maximize profits. \n\nWe can then calculate Total Revenue. This is P times Q, or this area.\n\nThe next step is to calculate Total Costs. Total Costs are calculated as ATC x Q. We need the ATC curve to do this. Once we know the ATC then we pin-point the intersection of the ATC curve and the vertical line we drew. Then we daw a horizontal line from this point over to the price axis. The area below this line represents our total costs. \n\nNow we can calculate profits. The equation is TR -TC, or another way is (Price-ATC) x Q. \n\nLet&amp;#x2019;s quickly review. We start with a flat demand curve which is also our marginal revenue curve. We then add a marginal cost curve. Using MR=MR we pinpoint the profit maximizing location and draw a line down to quantity. This are is total revenue. We then look at the Average Total Cost curve and pinpoint where it crosses our line and then draw a horizontal line. The area below this line is Total Cost and the area above is profit. \n\nLets look at another example.\n\nWe start with a flat demand curve which is also our marginal revenue curve. We then add a marginal cost curve. Using MR=MR we pinpoint the profit maximizing location and draw a line down to quantity. This are is total revenue. In this case the ATC curve is above the price line. If this is the case we will be looking for the location that minimizes losses. We pinpoint where ATC crosses our line and then draw a horizontal line. The area is Total Cost. Since Total Costs are larger than Total Revenue, this area represents our losses. Remember that using MC=MR we can figure out where our losses are minimized. \n\nAlright, now you know how to analyze Perfect Competition. \n\nDon&amp;#x2019;t forget you can rewind this video to make sure you understand how the graph works.\n
• Perfect Competition\n\nIn this video we&amp;#x2019;re going to talk about Perfect Competition.\n\nFirst we&amp;#x2019;ll draw and label our price-quantity graph.\n\nThen we&amp;#x2019;ll draw the demand curve.\n\nRemember that under perfect competition there is one price level for all individual sellers. This means the demand curve is flat. This also means the marginal revenue curve is the same as the demand curve. So price and demand and marginal revenue are all on the same line.\n\nSo the first question we want to answer is &amp;#x201C;At what level should we produce to maximize profits?&amp;#x201D; We always answer this question with the equation MR=MC.\nSo we need to see a marginal cost curve. This curve is a &amp;#x201C;U-shape&amp;#x201D; to indicate that costs typically tend to decline and then increase. \n\nNow that we have a MR and a MC curve we can pin-point the intersection. \n\nThe next step is to draw a vertical line down to the Quantity axis. This line will point to the quantity we should produce to maximize profits. \n\nWe can then calculate Total Revenue. This is P times Q, or this area.\n\nThe next step is to calculate Total Costs. Total Costs are calculated as ATC x Q. We need the ATC curve to do this. Once we know the ATC then we pin-point the intersection of the ATC curve and the vertical line we drew. Then we daw a horizontal line from this point over to the price axis. The area below this line represents our total costs. \n\nNow we can calculate profits. The equation is TR -TC, or another way is (Price-ATC) x Q. \n\nLet&amp;#x2019;s quickly review. We start with a flat demand curve which is also our marginal revenue curve. We then add a marginal cost curve. Using MR=MR we pinpoint the profit maximizing location and draw a line down to quantity. This are is total revenue. We then look at the Average Total Cost curve and pinpoint where it crosses our line and then draw a horizontal line. The area below this line is Total Cost and the area above is profit. \n\nLets look at another example.\n\nWe start with a flat demand curve which is also our marginal revenue curve. We then add a marginal cost curve. Using MR=MR we pinpoint the profit maximizing location and draw a line down to quantity. This are is total revenue. In this case the ATC curve is above the price line. If this is the case we will be looking for the location that minimizes losses. We pinpoint where ATC crosses our line and then draw a horizontal line. The area is Total Cost. Since Total Costs are larger than Total Revenue, this area represents our losses. Remember that using MC=MR we can figure out where our losses are minimized. \n\nAlright, now you know how to analyze Perfect Competition. \n\nDon&amp;#x2019;t forget you can rewind this video to make sure you understand how the graph works.\n
• Perfect Competition\n\nIn this video we&amp;#x2019;re going to talk about Perfect Competition.\n\nFirst we&amp;#x2019;ll draw and label our price-quantity graph.\n\nThen we&amp;#x2019;ll draw the demand curve.\n\nRemember that under perfect competition there is one price level for all individual sellers. This means the demand curve is flat. This also means the marginal revenue curve is the same as the demand curve. So price and demand and marginal revenue are all on the same line.\n\nSo the first question we want to answer is &amp;#x201C;At what level should we produce to maximize profits?&amp;#x201D; We always answer this question with the equation MR=MC.\nSo we need to see a marginal cost curve. This curve is a &amp;#x201C;U-shape&amp;#x201D; to indicate that costs typically tend to decline and then increase. \n\nNow that we have a MR and a MC curve we can pin-point the intersection. \n\nThe next step is to draw a vertical line down to the Quantity axis. This line will point to the quantity we should produce to maximize profits. \n\nWe can then calculate Total Revenue. This is P times Q, or this area.\n\nThe next step is to calculate Total Costs. Total Costs are calculated as ATC x Q. We need the ATC curve to do this. Once we know the ATC then we pin-point the intersection of the ATC curve and the vertical line we drew. Then we daw a horizontal line from this point over to the price axis. The area below this line represents our total costs. \n\nNow we can calculate profits. The equation is TR -TC, or another way is (Price-ATC) x Q. \n\nLet&amp;#x2019;s quickly review. We start with a flat demand curve which is also our marginal revenue curve. We then add a marginal cost curve. Using MR=MR we pinpoint the profit maximizing location and draw a line down to quantity. This are is total revenue. We then look at the Average Total Cost curve and pinpoint where it crosses our line and then draw a horizontal line. The area below this line is Total Cost and the area above is profit. \n\nLets look at another example.\n\nWe start with a flat demand curve which is also our marginal revenue curve. We then add a marginal cost curve. Using MR=MR we pinpoint the profit maximizing location and draw a line down to quantity. This are is total revenue. In this case the ATC curve is above the price line. If this is the case we will be looking for the location that minimizes losses. We pinpoint where ATC crosses our line and then draw a horizontal line. The area is Total Cost. Since Total Costs are larger than Total Revenue, this area represents our losses. Remember that using MC=MR we can figure out where our losses are minimized. \n\nAlright, now you know how to analyze Perfect Competition. \n\nDon&amp;#x2019;t forget you can rewind this video to make sure you understand how the graph works.\n
• Perfect Competition\n\nIn this video we&amp;#x2019;re going to talk about Perfect Competition.\n\nFirst we&amp;#x2019;ll draw and label our price-quantity graph.\n\nThen we&amp;#x2019;ll draw the demand curve.\n\nRemember that under perfect competition there is one price level for all individual sellers. This means the demand curve is flat. This also means the marginal revenue curve is the same as the demand curve. So price and demand and marginal revenue are all on the same line.\n\nSo the first question we want to answer is &amp;#x201C;At what level should we produce to maximize profits?&amp;#x201D; We always answer this question with the equation MR=MC.\nSo we need to see a marginal cost curve. This curve is a &amp;#x201C;U-shape&amp;#x201D; to indicate that costs typically tend to decline and then increase. \n\nNow that we have a MR and a MC curve we can pin-point the intersection. \n\nThe next step is to draw a vertical line down to the Quantity axis. This line will point to the quantity we should produce to maximize profits. \n\nWe can then calculate Total Revenue. This is P times Q, or this area.\n\nThe next step is to calculate Total Costs. Total Costs are calculated as ATC x Q. We need the ATC curve to do this. Once we know the ATC then we pin-point the intersection of the ATC curve and the vertical line we drew. Then we daw a horizontal line from this point over to the price axis. The area below this line represents our total costs. \n\nNow we can calculate profits. The equation is TR -TC, or another way is (Price-ATC) x Q. \n\nLet&amp;#x2019;s quickly review. We start with a flat demand curve which is also our marginal revenue curve. We then add a marginal cost curve. Using MR=MR we pinpoint the profit maximizing location and draw a line down to quantity. This are is total revenue. We then look at the Average Total Cost curve and pinpoint where it crosses our line and then draw a horizontal line. The area below this line is Total Cost and the area above is profit. \n\nLets look at another example.\n\nWe start with a flat demand curve which is also our marginal revenue curve. We then add a marginal cost curve. Using MR=MR we pinpoint the profit maximizing location and draw a line down to quantity. This are is total revenue. In this case the ATC curve is above the price line. If this is the case we will be looking for the location that minimizes losses. We pinpoint where ATC crosses our line and then draw a horizontal line. The area is Total Cost. Since Total Costs are larger than Total Revenue, this area represents our losses. Remember that using MC=MR we can figure out where our losses are minimized. \n\nAlright, now you know how to analyze Perfect Competition. \n\nDon&amp;#x2019;t forget you can rewind this video to make sure you understand how the graph works.\n
• Perfect Competition\n\nIn this video we&amp;#x2019;re going to talk about Perfect Competition.\n\nFirst we&amp;#x2019;ll draw and label our price-quantity graph.\n\nThen we&amp;#x2019;ll draw the demand curve.\n\nRemember that under perfect competition there is one price level for all individual sellers. This means the demand curve is flat. This also means the marginal revenue curve is the same as the demand curve. So price and demand and marginal revenue are all on the same line.\n\nSo the first question we want to answer is &amp;#x201C;At what level should we produce to maximize profits?&amp;#x201D; We always answer this question with the equation MR=MC.\nSo we need to see a marginal cost curve. This curve is a &amp;#x201C;U-shape&amp;#x201D; to indicate that costs typically tend to decline and then increase. \n\nNow that we have a MR and a MC curve we can pin-point the intersection. \n\nThe next step is to draw a vertical line down to the Quantity axis. This line will point to the quantity we should produce to maximize profits. \n\nWe can then calculate Total Revenue. This is P times Q, or this area.\n\nThe next step is to calculate Total Costs. Total Costs are calculated as ATC x Q. We need the ATC curve to do this. Once we know the ATC then we pin-point the intersection of the ATC curve and the vertical line we drew. Then we daw a horizontal line from this point over to the price axis. The area below this line represents our total costs. \n\nNow we can calculate profits. The equation is TR -TC, or another way is (Price-ATC) x Q. \n\nLet&amp;#x2019;s quickly review. We start with a flat demand curve which is also our marginal revenue curve. We then add a marginal cost curve. Using MR=MR we pinpoint the profit maximizing location and draw a line down to quantity. This are is total revenue. We then look at the Average Total Cost curve and pinpoint where it crosses our line and then draw a horizontal line. The area below this line is Total Cost and the area above is profit. \n\nLets look at another example.\n\nWe start with a flat demand curve which is also our marginal revenue curve. We then add a marginal cost curve. Using MR=MR we pinpoint the profit maximizing location and draw a line down to quantity. This are is total revenue. In this case the ATC curve is above the price line. If this is the case we will be looking for the location that minimizes losses. We pinpoint where ATC crosses our line and then draw a horizontal line. The area is Total Cost. Since Total Costs are larger than Total Revenue, this area represents our losses. Remember that using MC=MR we can figure out where our losses are minimized. \n\nAlright, now you know how to analyze Perfect Competition. \n\nDon&amp;#x2019;t forget you can rewind this video to make sure you understand how the graph works.\n
• Perfect Competition\n\nIn this video we&amp;#x2019;re going to talk about Perfect Competition.\n\nFirst we&amp;#x2019;ll draw and label our price-quantity graph.\n\nThen we&amp;#x2019;ll draw the demand curve.\n\nRemember that under perfect competition there is one price level for all individual sellers. This means the demand curve is flat. This also means the marginal revenue curve is the same as the demand curve. So price and demand and marginal revenue are all on the same line.\n\nSo the first question we want to answer is &amp;#x201C;At what level should we produce to maximize profits?&amp;#x201D; We always answer this question with the equation MR=MC.\nSo we need to see a marginal cost curve. This curve is a &amp;#x201C;U-shape&amp;#x201D; to indicate that costs typically tend to decline and then increase. \n\nNow that we have a MR and a MC curve we can pin-point the intersection. \n\nThe next step is to draw a vertical line down to the Quantity axis. This line will point to the quantity we should produce to maximize profits. \n\nWe can then calculate Total Revenue. This is P times Q, or this area.\n\nThe next step is to calculate Total Costs. Total Costs are calculated as ATC x Q. We need the ATC curve to do this. Once we know the ATC then we pin-point the intersection of the ATC curve and the vertical line we drew. Then we daw a horizontal line from this point over to the price axis. The area below this line represents our total costs. \n\nNow we can calculate profits. The equation is TR -TC, or another way is (Price-ATC) x Q. \n\nLet&amp;#x2019;s quickly review. We start with a flat demand curve which is also our marginal revenue curve. We then add a marginal cost curve. Using MR=MR we pinpoint the profit maximizing location and draw a line down to quantity. This are is total revenue. We then look at the Average Total Cost curve and pinpoint where it crosses our line and then draw a horizontal line. The area below this line is Total Cost and the area above is profit. \n\nLets look at another example.\n\nWe start with a flat demand curve which is also our marginal revenue curve. We then add a marginal cost curve. Using MR=MR we pinpoint the profit maximizing location and draw a line down to quantity. This are is total revenue. In this case the ATC curve is above the price line. If this is the case we will be looking for the location that minimizes losses. We pinpoint where ATC crosses our line and then draw a horizontal line. The area is Total Cost. Since Total Costs are larger than Total Revenue, this area represents our losses. Remember that using MC=MR we can figure out where our losses are minimized. \n\nAlright, now you know how to analyze Perfect Competition. \n\nDon&amp;#x2019;t forget you can rewind this video to make sure you understand how the graph works.\n
• Perfect Competition\n\nIn this video we&amp;#x2019;re going to talk about Perfect Competition.\n\nFirst we&amp;#x2019;ll draw and label our price-quantity graph.\n\nThen we&amp;#x2019;ll draw the demand curve.\n\nRemember that under perfect competition there is one price level for all individual sellers. This means the demand curve is flat. This also means the marginal revenue curve is the same as the demand curve. So price and demand and marginal revenue are all on the same line.\n\nSo the first question we want to answer is &amp;#x201C;At what level should we produce to maximize profits?&amp;#x201D; We always answer this question with the equation MR=MC.\nSo we need to see a marginal cost curve. This curve is a &amp;#x201C;U-shape&amp;#x201D; to indicate that costs typically tend to decline and then increase. \n\nNow that we have a MR and a MC curve we can pin-point the intersection. \n\nThe next step is to draw a vertical line down to the Quantity axis. This line will point to the quantity we should produce to maximize profits. \n\nWe can then calculate Total Revenue. This is P times Q, or this area.\n\nThe next step is to calculate Total Costs. Total Costs are calculated as ATC x Q. We need the ATC curve to do this. Once we know the ATC then we pin-point the intersection of the ATC curve and the vertical line we drew. Then we daw a horizontal line from this point over to the price axis. The area below this line represents our total costs. \n\nNow we can calculate profits. The equation is TR -TC, or another way is (Price-ATC) x Q. \n\nLet&amp;#x2019;s quickly review. We start with a flat demand curve which is also our marginal revenue curve. We then add a marginal cost curve. Using MR=MR we pinpoint the profit maximizing location and draw a line down to quantity. This are is total revenue. We then look at the Average Total Cost curve and pinpoint where it crosses our line and then draw a horizontal line. The area below this line is Total Cost and the area above is profit. \n\nLets look at another example.\n\nWe start with a flat demand curve which is also our marginal revenue curve. We then add a marginal cost curve. Using MR=MR we pinpoint the profit maximizing location and draw a line down to quantity. This are is total revenue. In this case the ATC curve is above the price line. If this is the case we will be looking for the location that minimizes losses. We pinpoint where ATC crosses our line and then draw a horizontal line. The area is Total Cost. Since Total Costs are larger than Total Revenue, this area represents our losses. Remember that using MC=MR we can figure out where our losses are minimized. \n\nAlright, now you know how to analyze Perfect Competition. \n\nDon&amp;#x2019;t forget you can rewind this video to make sure you understand how the graph works.\n
• Perfect Competition\n\nIn this video we&amp;#x2019;re going to talk about Perfect Competition.\n\nFirst we&amp;#x2019;ll draw and label our price-quantity graph.\n\nThen we&amp;#x2019;ll draw the demand curve.\n\nRemember that under perfect competition there is one price level for all individual sellers. This means the demand curve is flat. This also means the marginal revenue curve is the same as the demand curve. So price and demand and marginal revenue are all on the same line.\n\nSo the first question we want to answer is &amp;#x201C;At what level should we produce to maximize profits?&amp;#x201D; We always answer this question with the equation MR=MC.\nSo we need to see a marginal cost curve. This curve is a &amp;#x201C;U-shape&amp;#x201D; to indicate that costs typically tend to decline and then increase. \n\nNow that we have a MR and a MC curve we can pin-point the intersection. \n\nThe next step is to draw a vertical line down to the Quantity axis. This line will point to the quantity we should produce to maximize profits. \n\nWe can then calculate Total Revenue. This is P times Q, or this area.\n\nThe next step is to calculate Total Costs. Total Costs are calculated as ATC x Q. We need the ATC curve to do this. Once we know the ATC then we pin-point the intersection of the ATC curve and the vertical line we drew. Then we daw a horizontal line from this point over to the price axis. The area below this line represents our total costs. \n\nNow we can calculate profits. The equation is TR -TC, or another way is (Price-ATC) x Q. \n\nLet&amp;#x2019;s quickly review. We start with a flat demand curve which is also our marginal revenue curve. We then add a marginal cost curve. Using MR=MR we pinpoint the profit maximizing location and draw a line down to quantity. This are is total revenue. We then look at the Average Total Cost curve and pinpoint where it crosses our line and then draw a horizontal line. The area below this line is Total Cost and the area above is profit. \n\nLets look at another example.\n\nWe start with a flat demand curve which is also our marginal revenue curve. We then add a marginal cost curve. Using MR=MR we pinpoint the profit maximizing location and draw a line down to quantity. This are is total revenue. In this case the ATC curve is above the price line. If this is the case we will be looking for the location that minimizes losses. We pinpoint where ATC crosses our line and then draw a horizontal line. The area is Total Cost. Since Total Costs are larger than Total Revenue, this area represents our losses. Remember that using MC=MR we can figure out where our losses are minimized. \n\nAlright, now you know how to analyze Perfect Competition. \n\nDon&amp;#x2019;t forget you can rewind this video to make sure you understand how the graph works.\n
• Perfect Competition\n\nIn this video we&amp;#x2019;re going to talk about Perfect Competition.\n\nFirst we&amp;#x2019;ll draw and label our price-quantity graph.\n\nThen we&amp;#x2019;ll draw the demand curve.\n\nRemember that under perfect competition there is one price level for all individual sellers. This means the demand curve is flat. This also means the marginal revenue curve is the same as the demand curve. So price and demand and marginal revenue are all on the same line.\n\nSo the first question we want to answer is &amp;#x201C;At what level should we produce to maximize profits?&amp;#x201D; We always answer this question with the equation MR=MC.\nSo we need to see a marginal cost curve. This curve is a &amp;#x201C;U-shape&amp;#x201D; to indicate that costs typically tend to decline and then increase. \n\nNow that we have a MR and a MC curve we can pin-point the intersection. \n\nThe next step is to draw a vertical line down to the Quantity axis. This line will point to the quantity we should produce to maximize profits. \n\nWe can then calculate Total Revenue. This is P times Q, or this area.\n\nThe next step is to calculate Total Costs. Total Costs are calculated as ATC x Q. We need the ATC curve to do this. Once we know the ATC then we pin-point the intersection of the ATC curve and the vertical line we drew. Then we daw a horizontal line from this point over to the price axis. The area below this line represents our total costs. \n\nNow we can calculate profits. The equation is TR -TC, or another way is (Price-ATC) x Q. \n\nLet&amp;#x2019;s quickly review. We start with a flat demand curve which is also our marginal revenue curve. We then add a marginal cost curve. Using MR=MR we pinpoint the profit maximizing location and draw a line down to quantity. This are is total revenue. We then look at the Average Total Cost curve and pinpoint where it crosses our line and then draw a horizontal line. The area below this line is Total Cost and the area above is profit. \n\nLets look at another example.\n\nWe start with a flat demand curve which is also our marginal revenue curve. We then add a marginal cost curve. Using MR=MR we pinpoint the profit maximizing location and draw a line down to quantity. This are is total revenue. In this case the ATC curve is above the price line. If this is the case we will be looking for the location that minimizes losses. We pinpoint where ATC crosses our line and then draw a horizontal line. The area is Total Cost. Since Total Costs are larger than Total Revenue, this area represents our losses. Remember that using MC=MR we can figure out where our losses are minimized. \n\nAlright, now you know how to analyze Perfect Competition. \n\nDon&amp;#x2019;t forget you can rewind this video to make sure you understand how the graph works.\n
• Perfect Competition\n\nIn this video we&amp;#x2019;re going to talk about Perfect Competition.\n\nFirst we&amp;#x2019;ll draw and label our price-quantity graph.\n\nThen we&amp;#x2019;ll draw the demand curve.\n\nRemember that under perfect competition there is one price level for all individual sellers. This means the demand curve is flat. This also means the marginal revenue curve is the same as the demand curve. So price and demand and marginal revenue are all on the same line.\n\nSo the first question we want to answer is &amp;#x201C;At what level should we produce to maximize profits?&amp;#x201D; We always answer this question with the equation MR=MC.\nSo we need to see a marginal cost curve. This curve is a &amp;#x201C;U-shape&amp;#x201D; to indicate that costs typically tend to decline and then increase. \n\nNow that we have a MR and a MC curve we can pin-point the intersection. \n\nThe next step is to draw a vertical line down to the Quantity axis. This line will point to the quantity we should produce to maximize profits. \n\nWe can then calculate Total Revenue. This is P times Q, or this area.\n\nThe next step is to calculate Total Costs. Total Costs are calculated as ATC x Q. We need the ATC curve to do this. Once we know the ATC then we pin-point the intersection of the ATC curve and the vertical line we drew. Then we daw a horizontal line from this point over to the price axis. The area below this line represents our total costs. \n\nNow we can calculate profits. The equation is TR -TC, or another way is (Price-ATC) x Q. \n\nLet&amp;#x2019;s quickly review. We start with a flat demand curve which is also our marginal revenue curve. We then add a marginal cost curve. Using MR=MR we pinpoint the profit maximizing location and draw a line down to quantity. This are is total revenue. We then look at the Average Total Cost curve and pinpoint where it crosses our line and then draw a horizontal line. The area below this line is Total Cost and the area above is profit. \n\nLets look at another example.\n\nWe start with a flat demand curve which is also our marginal revenue curve. We then add a marginal cost curve. Using MR=MR we pinpoint the profit maximizing location and draw a line down to quantity. This are is total revenue. In this case the ATC curve is above the price line. If this is the case we will be looking for the location that minimizes losses. We pinpoint where ATC crosses our line and then draw a horizontal line. The area is Total Cost. Since Total Costs are larger than Total Revenue, this area represents our losses. Remember that using MC=MR we can figure out where our losses are minimized. \n\nAlright, now you know how to analyze Perfect Competition. \n\nDon&amp;#x2019;t forget you can rewind this video to make sure you understand how the graph works.\n
• Perfect Competition\n\nIn this video we&amp;#x2019;re going to talk about Perfect Competition.\n\nFirst we&amp;#x2019;ll draw and label our price-quantity graph.\n\nThen we&amp;#x2019;ll draw the demand curve.\n\nRemember that under perfect competition there is one price level for all individual sellers. This means the demand curve is flat. This also means the marginal revenue curve is the same as the demand curve. So price and demand and marginal revenue are all on the same line.\n\nSo the first question we want to answer is &amp;#x201C;At what level should we produce to maximize profits?&amp;#x201D; We always answer this question with the equation MR=MC.\nSo we need to see a marginal cost curve. This curve is a &amp;#x201C;U-shape&amp;#x201D; to indicate that costs typically tend to decline and then increase. \n\nNow that we have a MR and a MC curve we can pin-point the intersection. \n\nThe next step is to draw a vertical line down to the Quantity axis. This line will point to the quantity we should produce to maximize profits. \n\nWe can then calculate Total Revenue. This is P times Q, or this area.\n\nThe next step is to calculate Total Costs. Total Costs are calculated as ATC x Q. We need the ATC curve to do this. Once we know the ATC then we pin-point the intersection of the ATC curve and the vertical line we drew. Then we daw a horizontal line from this point over to the price axis. The area below this line represents our total costs. \n\nNow we can calculate profits. The equation is TR -TC, or another way is (Price-ATC) x Q. \n\nLet&amp;#x2019;s quickly review. We start with a flat demand curve which is also our marginal revenue curve. We then add a marginal cost curve. Using MR=MR we pinpoint the profit maximizing location and draw a line down to quantity. This are is total revenue. We then look at the Average Total Cost curve and pinpoint where it crosses our line and then draw a horizontal line. The area below this line is Total Cost and the area above is profit. \n\nLets look at another example.\n\nWe start with a flat demand curve which is also our marginal revenue curve. We then add a marginal cost curve. Using MR=MR we pinpoint the profit maximizing location and draw a line down to quantity. This are is total revenue. In this case the ATC curve is above the price line. If this is the case we will be looking for the location that minimizes losses. We pinpoint where ATC crosses our line and then draw a horizontal line. The area is Total Cost. Since Total Costs are larger than Total Revenue, this area represents our losses. Remember that using MC=MR we can figure out where our losses are minimized. \n\nAlright, now you know how to analyze Perfect Competition. \n\nDon&amp;#x2019;t forget you can rewind this video to make sure you understand how the graph works.\n
• Perfect Competition\n\nIn this video we&amp;#x2019;re going to talk about Perfect Competition.\n\nFirst we&amp;#x2019;ll draw and label our price-quantity graph.\n\nThen we&amp;#x2019;ll draw the demand curve.\n\nRemember that under perfect competition there is one price level for all individual sellers. This means the demand curve is flat. This also means the marginal revenue curve is the same as the demand curve. So price and demand and marginal revenue are all on the same line.\n\nSo the first question we want to answer is &amp;#x201C;At what level should we produce to maximize profits?&amp;#x201D; We always answer this question with the equation MR=MC.\nSo we need to see a marginal cost curve. This curve is a &amp;#x201C;U-shape&amp;#x201D; to indicate that costs typically tend to decline and then increase. \n\nNow that we have a MR and a MC curve we can pin-point the intersection. \n\nThe next step is to draw a vertical line down to the Quantity axis. This line will point to the quantity we should produce to maximize profits. \n\nWe can then calculate Total Revenue. This is P times Q, or this area.\n\nThe next step is to calculate Total Costs. Total Costs are calculated as ATC x Q. We need the ATC curve to do this. Once we know the ATC then we pin-point the intersection of the ATC curve and the vertical line we drew. Then we daw a horizontal line from this point over to the price axis. The area below this line represents our total costs. \n\nNow we can calculate profits. The equation is TR -TC, or another way is (Price-ATC) x Q. \n\nLet&amp;#x2019;s quickly review. We start with a flat demand curve which is also our marginal revenue curve. We then add a marginal cost curve. Using MR=MR we pinpoint the profit maximizing location and draw a line down to quantity. This are is total revenue. We then look at the Average Total Cost curve and pinpoint where it crosses our line and then draw a horizontal line. The area below this line is Total Cost and the area above is profit. \n\nLets look at another example.\n\nWe start with a flat demand curve which is also our marginal revenue curve. We then add a marginal cost curve. Using MR=MR we pinpoint the profit maximizing location and draw a line down to quantity. This are is total revenue. In this case the ATC curve is above the price line. If this is the case we will be looking for the location that minimizes losses. We pinpoint where ATC crosses our line and then draw a horizontal line. The area is Total Cost. Since Total Costs are larger than Total Revenue, this area represents our losses. Remember that using MC=MR we can figure out where our losses are minimized. \n\nAlright, now you know how to analyze Perfect Competition. \n\nDon&amp;#x2019;t forget you can rewind this video to make sure you understand how the graph works.\n
• Perfect Competition\n\nIn this video we&amp;#x2019;re going to talk about Perfect Competition.\n\nFirst we&amp;#x2019;ll draw and label our price-quantity graph.\n\nThen we&amp;#x2019;ll draw the demand curve.\n\nRemember that under perfect competition there is one price level for all individual sellers. This means the demand curve is flat. This also means the marginal revenue curve is the same as the demand curve. So price and demand and marginal revenue are all on the same line.\n\nSo the first question we want to answer is &amp;#x201C;At what level should we produce to maximize profits?&amp;#x201D; We always answer this question with the equation MR=MC.\nSo we need to see a marginal cost curve. This curve is a &amp;#x201C;U-shape&amp;#x201D; to indicate that costs typically tend to decline and then increase. \n\nNow that we have a MR and a MC curve we can pin-point the intersection. \n\nThe next step is to draw a vertical line down to the Quantity axis. This line will point to the quantity we should produce to maximize profits. \n\nWe can then calculate Total Revenue. This is P times Q, or this area.\n\nThe next step is to calculate Total Costs. Total Costs are calculated as ATC x Q. We need the ATC curve to do this. Once we know the ATC then we pin-point the intersection of the ATC curve and the vertical line we drew. Then we daw a horizontal line from this point over to the price axis. The area below this line represents our total costs. \n\nNow we can calculate profits. The equation is TR -TC, or another way is (Price-ATC) x Q. \n\nLet&amp;#x2019;s quickly review. We start with a flat demand curve which is also our marginal revenue curve. We then add a marginal cost curve. Using MR=MR we pinpoint the profit maximizing location and draw a line down to quantity. This are is total revenue. We then look at the Average Total Cost curve and pinpoint where it crosses our line and then draw a horizontal line. The area below this line is Total Cost and the area above is profit. \n\nLets look at another example.\n\nWe start with a flat demand curve which is also our marginal revenue curve. We then add a marginal cost curve. Using MR=MR we pinpoint the profit maximizing location and draw a line down to quantity. This are is total revenue. In this case the ATC curve is above the price line. If this is the case we will be looking for the location that minimizes losses. We pinpoint where ATC crosses our line and then draw a horizontal line. The area is Total Cost. Since Total Costs are larger than Total Revenue, this area represents our losses. Remember that using MC=MR we can figure out where our losses are minimized. \n\nAlright, now you know how to analyze Perfect Competition. \n\nDon&amp;#x2019;t forget you can rewind this video to make sure you understand how the graph works.\n
• Perfect Competition\n\nIn this video we&amp;#x2019;re going to talk about Perfect Competition.\n\nFirst we&amp;#x2019;ll draw and label our price-quantity graph.\n\nThen we&amp;#x2019;ll draw the demand curve.\n\nRemember that under perfect competition there is one price level for all individual sellers. This means the demand curve is flat. This also means the marginal revenue curve is the same as the demand curve. So price and demand and marginal revenue are all on the same line.\n\nSo the first question we want to answer is &amp;#x201C;At what level should we produce to maximize profits?&amp;#x201D; We always answer this question with the equation MR=MC.\nSo we need to see a marginal cost curve. This curve is a &amp;#x201C;U-shape&amp;#x201D; to indicate that costs typically tend to decline and then increase. \n\nNow that we have a MR and a MC curve we can pin-point the intersection. \n\nThe next step is to draw a vertical line down to the Quantity axis. This line will point to the quantity we should produce to maximize profits. \n\nWe can then calculate Total Revenue. This is P times Q, or this area.\n\nThe next step is to calculate Total Costs. Total Costs are calculated as ATC x Q. We need the ATC curve to do this. Once we know the ATC then we pin-point the intersection of the ATC curve and the vertical line we drew. Then we daw a horizontal line from this point over to the price axis. The area below this line represents our total costs. \n\nNow we can calculate profits. The equation is TR -TC, or another way is (Price-ATC) x Q. \n\nLet&amp;#x2019;s quickly review. We start with a flat demand curve which is also our marginal revenue curve. We then add a marginal cost curve. Using MR=MR we pinpoint the profit maximizing location and draw a line down to quantity. This are is total revenue. We then look at the Average Total Cost curve and pinpoint where it crosses our line and then draw a horizontal line. The area below this line is Total Cost and the area above is profit. \n\nLets look at another example.\n\nWe start with a flat demand curve which is also our marginal revenue curve. We then add a marginal cost curve. Using MR=MR we pinpoint the profit maximizing location and draw a line down to quantity. This are is total revenue. In this case the ATC curve is above the price line. If this is the case we will be looking for the location that minimizes losses. We pinpoint where ATC crosses our line and then draw a horizontal line. The area is Total Cost. Since Total Costs are larger than Total Revenue, this area represents our losses. Remember that using MC=MR we can figure out where our losses are minimized. \n\nAlright, now you know how to analyze Perfect Competition. \n\nDon&amp;#x2019;t forget you can rewind this video to make sure you understand how the graph works.\n
• Perfect Competition\n\nIn this video we&amp;#x2019;re going to talk about Perfect Competition.\n\nFirst we&amp;#x2019;ll draw and label our price-quantity graph.\n\nThen we&amp;#x2019;ll draw the demand curve.\n\nRemember that under perfect competition there is one price level for all individual sellers. This means the demand curve is flat. This also means the marginal revenue curve is the same as the demand curve. So price and demand and marginal revenue are all on the same line.\n\nSo the first question we want to answer is &amp;#x201C;At what level should we produce to maximize profits?&amp;#x201D; We always answer this question with the equation MR=MC.\nSo we need to see a marginal cost curve. This curve is a &amp;#x201C;U-shape&amp;#x201D; to indicate that costs typically tend to decline and then increase. \n\nNow that we have a MR and a MC curve we can pin-point the intersection. \n\nThe next step is to draw a vertical line down to the Quantity axis. This line will point to the quantity we should produce to maximize profits. \n\nWe can then calculate Total Revenue. This is P times Q, or this area.\n\nThe next step is to calculate Total Costs. Total Costs are calculated as ATC x Q. We need the ATC curve to do this. Once we know the ATC then we pin-point the intersection of the ATC curve and the vertical line we drew. Then we daw a horizontal line from this point over to the price axis. The area below this line represents our total costs. \n\nNow we can calculate profits. The equation is TR -TC, or another way is (Price-ATC) x Q. \n\nLet&amp;#x2019;s quickly review. We start with a flat demand curve which is also our marginal revenue curve. We then add a marginal cost curve. Using MR=MR we pinpoint the profit maximizing location and draw a line down to quantity. This are is total revenue. We then look at the Average Total Cost curve and pinpoint where it crosses our line and then draw a horizontal line. The area below this line is Total Cost and the area above is profit. \n\nLets look at another example.\n\nWe start with a flat demand curve which is also our marginal revenue curve. We then add a marginal cost curve. Using MR=MR we pinpoint the profit maximizing location and draw a line down to quantity. This are is total revenue. In this case the ATC curve is above the price line. If this is the case we will be looking for the location that minimizes losses. We pinpoint where ATC crosses our line and then draw a horizontal line. The area is Total Cost. Since Total Costs are larger than Total Revenue, this area represents our losses. Remember that using MC=MR we can figure out where our losses are minimized. \n\nAlright, now you know how to analyze Perfect Competition. \n\nDon&amp;#x2019;t forget you can rewind this video to make sure you understand how the graph works.\n
• Perfect Competition\n\nIn this video we&amp;#x2019;re going to talk about Perfect Competition.\n\nFirst we&amp;#x2019;ll draw and label our price-quantity graph.\n\nThen we&amp;#x2019;ll draw the demand curve.\n\nRemember that under perfect competition there is one price level for all individual sellers. This means the demand curve is flat. This also means the marginal revenue curve is the same as the demand curve. So price and demand and marginal revenue are all on the same line.\n\nSo the first question we want to answer is &amp;#x201C;At what level should we produce to maximize profits?&amp;#x201D; We always answer this question with the equation MR=MC.\nSo we need to see a marginal cost curve. This curve is a &amp;#x201C;U-shape&amp;#x201D; to indicate that costs typically tend to decline and then increase. \n\nNow that we have a MR and a MC curve we can pin-point the intersection. \n\nThe next step is to draw a vertical line down to the Quantity axis. This line will point to the quantity we should produce to maximize profits. \n\nWe can then calculate Total Revenue. This is P times Q, or this area.\n\nThe next step is to calculate Total Costs. Total Costs are calculated as ATC x Q. We need the ATC curve to do this. Once we know the ATC then we pin-point the intersection of the ATC curve and the vertical line we drew. Then we daw a horizontal line from this point over to the price axis. The area below this line represents our total costs. \n\nNow we can calculate profits. The equation is TR -TC, or another way is (Price-ATC) x Q. \n\nLet&amp;#x2019;s quickly review. We start with a flat demand curve which is also our marginal revenue curve. We then add a marginal cost curve. Using MR=MR we pinpoint the profit maximizing location and draw a line down to quantity. This are is total revenue. We then look at the Average Total Cost curve and pinpoint where it crosses our line and then draw a horizontal line. The area below this line is Total Cost and the area above is profit. \n\nLets look at another example.\n\nWe start with a flat demand curve which is also our marginal revenue curve. We then add a marginal cost curve. Using MR=MR we pinpoint the profit maximizing location and draw a line down to quantity. This are is total revenue. In this case the ATC curve is above the price line. If this is the case we will be looking for the location that minimizes losses. We pinpoint where ATC crosses our line and then draw a horizontal line. The area is Total Cost. Since Total Costs are larger than Total Revenue, this area represents our losses. Remember that using MC=MR we can figure out where our losses are minimized. \n\nAlright, now you know how to analyze Perfect Competition. \n\nDon&amp;#x2019;t forget you can rewind this video to make sure you understand how the graph works.\n
• Perfect Competition\n\nIn this video we&amp;#x2019;re going to talk about Perfect Competition.\n\nFirst we&amp;#x2019;ll draw and label our price-quantity graph.\n\nThen we&amp;#x2019;ll draw the demand curve.\n\nRemember that under perfect competition there is one price level for all individual sellers. This means the demand curve is flat. This also means the marginal revenue curve is the same as the demand curve. So price and demand and marginal revenue are all on the same line.\n\nSo the first question we want to answer is &amp;#x201C;At what level should we produce to maximize profits?&amp;#x201D; We always answer this question with the equation MR=MC.\nSo we need to see a marginal cost curve. This curve is a &amp;#x201C;U-shape&amp;#x201D; to indicate that costs typically tend to decline and then increase. \n\nNow that we have a MR and a MC curve we can pin-point the intersection. \n\nThe next step is to draw a vertical line down to the Quantity axis. This line will point to the quantity we should produce to maximize profits. \n\nWe can then calculate Total Revenue. This is P times Q, or this area.\n\nThe next step is to calculate Total Costs. Total Costs are calculated as ATC x Q. We need the ATC curve to do this. Once we know the ATC then we pin-point the intersection of the ATC curve and the vertical line we drew. Then we daw a horizontal line from this point over to the price axis. The area below this line represents our total costs. \n\nNow we can calculate profits. The equation is TR -TC, or another way is (Price-ATC) x Q. \n\nLet&amp;#x2019;s quickly review. We start with a flat demand curve which is also our marginal revenue curve. We then add a marginal cost curve. Using MR=MR we pinpoint the profit maximizing location and draw a line down to quantity. This are is total revenue. We then look at the Average Total Cost curve and pinpoint where it crosses our line and then draw a horizontal line. The area below this line is Total Cost and the area above is profit. \n\nLets look at another example.\n\nWe start with a flat demand curve which is also our marginal revenue curve. We then add a marginal cost curve. Using MR=MR we pinpoint the profit maximizing location and draw a line down to quantity. This are is total revenue. In this case the ATC curve is above the price line. If this is the case we will be looking for the location that minimizes losses. We pinpoint where ATC crosses our line and then draw a horizontal line. The area is Total Cost. Since Total Costs are larger than Total Revenue, this area represents our losses. Remember that using MC=MR we can figure out where our losses are minimized. \n\nAlright, now you know how to analyze Perfect Competition. \n\nDon&amp;#x2019;t forget you can rewind this video to make sure you understand how the graph works.\n
• Perfect Competition\n\nIn this video we&amp;#x2019;re going to talk about Perfect Competition.\n\nFirst we&amp;#x2019;ll draw and label our price-quantity graph.\n\nThen we&amp;#x2019;ll draw the demand curve.\n\nRemember that under perfect competition there is one price level for all individual sellers. This means the demand curve is flat. This also means the marginal revenue curve is the same as the demand curve. So price and demand and marginal revenue are all on the same line.\n\nSo the first question we want to answer is &amp;#x201C;At what level should we produce to maximize profits?&amp;#x201D; We always answer this question with the equation MR=MC.\nSo we need to see a marginal cost curve. This curve is a &amp;#x201C;U-shape&amp;#x201D; to indicate that costs typically tend to decline and then increase. \n\nNow that we have a MR and a MC curve we can pin-point the intersection. \n\nThe next step is to draw a vertical line down to the Quantity axis. This line will point to the quantity we should produce to maximize profits. \n\nWe can then calculate Total Revenue. This is P times Q, or this area.\n\nThe next step is to calculate Total Costs. Total Costs are calculated as ATC x Q. We need the ATC curve to do this. Once we know the ATC then we pin-point the intersection of the ATC curve and the vertical line we drew. Then we daw a horizontal line from this point over to the price axis. The area below this line represents our total costs. \n\nNow we can calculate profits. The equation is TR -TC, or another way is (Price-ATC) x Q. \n\nLet&amp;#x2019;s quickly review. We start with a flat demand curve which is also our marginal revenue curve. We then add a marginal cost curve. Using MR=MR we pinpoint the profit maximizing location and draw a line down to quantity. This are is total revenue. We then look at the Average Total Cost curve and pinpoint where it crosses our line and then draw a horizontal line. The area below this line is Total Cost and the area above is profit. \n\nLets look at another example.\n\nWe start with a flat demand curve which is also our marginal revenue curve. We then add a marginal cost curve. Using MR=MR we pinpoint the profit maximizing location and draw a line down to quantity. This are is total revenue. In this case the ATC curve is above the price line. If this is the case we will be looking for the location that minimizes losses. We pinpoint where ATC crosses our line and then draw a horizontal line. The area is Total Cost. Since Total Costs are larger than Total Revenue, this area represents our losses. Remember that using MC=MR we can figure out where our losses are minimized. \n\nAlright, now you know how to analyze Perfect Competition. \n\nDon&amp;#x2019;t forget you can rewind this video to make sure you understand how the graph works.\n
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• Monopoly

1. 1. Microeconomics Monopoly andAnti-Trust Policy
2. 2. Perfect Monopoly CompetitionNumber of Firms Many OneType of Product Identical Unique Ease of Entry Easy Blocked Demand D = MR D > MR Commodities Utilities Examples Rice Government Apples
3. 3. Perfect Monopoly CompetitionNumber of Firms Many OneType of Product Identical Unique Ease of Entry Easy Blocked Demand D = MR D > MR Commodities Utilities Examples Rice Government Apples
4. 4. Perfect Monopoly CompetitionNumber of Firms Many OneType of Product Identical Unique Ease of Entry Easy Blocked Demand D = MR D > MR Commodities Utilities Examples Rice Government Apples
5. 5. Monopoly
6. 6. Monopoly Only SellerNo Close Substitutes
7. 7. Barriers to Entry
8. 8. Barriers to EntryGovernment Protection Key ResourceNetwork Externalities Economies of Scale
11. 11. Franchise
12. 12. FranchiseExclusive Legal Provider
13. 13. New Drugs
14. 14. New Drugs 10 Years of Testing before Approval10 Years of Monopoly
15. 15. Network Externalities
16. 16. Network ExternalitiesThe more who use itThe more valuable it becomes
17. 17. Natural Monopoly
18. 18. Natural Monopoly One ﬁrm can supplyentire market at a loweraverage cost than two or more ﬁrms
19. 19. Natural Monopoly
20. 20. Natural Monopoly The more I makethe lower my costsLarge Fixed Costs
21. 21. Is competition always good?
22. 22. Is competition always good?Sometimes it can lead to higher prices
23. 23. MonopolyOutput and Price
24. 24. Monopoly Output and Price Lower Price: Good: Sell MoreBad: Less Revenue Per Unit
25. 25. Perfect Competition
26. 26. Perfect Competition\$ Quantity
27. 27. Perfect Competition\$P Demand=MR Quantity
28. 28. Perfect Competition\$ Marginal Cost MCP Demand=MR Quantity
29. 29. Perfect Competition\$ Marginal Cost MCP Demand=MR Quantity
30. 30. Perfect Competition\$ Marginal Cost MCP Demand=MR Quantity Q
31. 31. Perfect Competition\$ Marginal Cost MCP Demand=MR Total Revenue Quantity Q
32. 32. Perfect Competition\$ Marginal Cost MC Average Cost ATCP Demand=MR Total Revenue Quantity Q
33. 33. Perfect Competition\$ Marginal Cost MC Average Cost ATCP Demand=MR Total Revenue Quantity Q
34. 34. Perfect Competition\$ Marginal Cost MC Average Cost ATCP Demand=MR Total Cost Quantity Q
35. 35. Perfect Competition\$ Marginal Cost MC Average Cost ATCP Demand=MR Proﬁt Total Cost Quantity Q
36. 36. Perfect Competition
37. 37. Perfect Competition Demand
38. 38. Perfect Competition Demand MR
39. 39. Perfect Competition Demand = MR
40. 40. Monopoly Demand MR
41. 41. Monopoly MR Demand
42. 42. Monopoly Demand MR
43. 43. Perfect Competition MonopolyQ D TR MR D TR MR12345Monopoly: To get more Quantity must lower price
44. 44. Perfect Competition MonopolyQ D TR MR D TR MR12345Monopoly: To get more Quantity must lower price
45. 45. Perfect Competition MonopolyQ D TR MR D TR MR1 \$3 \$3 \$3 \$5 \$5 \$52 \$3 \$6 \$3 \$4 \$8 \$33 \$3 \$9 \$3 \$3 \$9 \$14 \$3 \$12 \$3 \$2 \$8 -\$15 \$3 \$15 \$3 \$1 \$5 -\$3Monopoly: To get more Quantity must lower price
46. 46. Perfect Competition MonopolyQ D TR MR D TR MR1 \$3 \$3 \$3 \$5 \$5 \$52 \$3 \$6 \$3 \$4 \$8 \$33 \$3 \$9 \$3 \$3 \$9 \$14 \$3 \$12 \$3 \$2 \$8 -\$15 \$3 \$15 \$3 \$1 \$5 -\$3Monopoly: To get more Quantity must lower price
47. 47. Perfect Competition MonopolyQ D TR MR D TR MR1 \$3 \$3 \$3 \$5 \$5 \$52 \$3 \$6 \$3 \$4 \$8 \$33 \$3 \$9 \$3 \$3 \$9 \$14 \$3 \$12 \$3 \$2 \$8 -\$15 \$3 \$15 \$3 \$1 \$5 -\$3Monopoly: To get more Quantity must lower price
48. 48. Perfect Competition MonopolyQ D TR MR D TR MR1 \$3 \$3 \$3 \$5 \$5 \$52 \$3 \$6 \$3 \$4 \$8 \$33 \$3 \$9 \$3 \$3 \$9 \$14 \$3 \$12 \$3 \$2 \$8 -\$15 \$3 \$15 \$3 \$1 \$5 -\$3Monopoly: To get more Quantity must lower price
49. 49. Perfect Competition MonopolyQ D TR MR D TR MR1 \$3 \$3 \$3 \$5 \$5 \$52 \$3 \$6 \$3 \$4 \$8 \$33 \$3 \$9 \$3 \$3 \$9 \$14 \$3 \$12 \$3 \$2 \$8 -\$15 \$3 \$15 \$3 \$1 \$5 -\$3Monopoly: To get more Quantity must lower price
50. 50. Perfect Competition MonopolyQ D TR MR D TR MR1 \$3 \$3 \$3 \$5 \$5 \$52 \$3 \$6 \$3 \$4 \$8 \$33 \$3 \$9 \$3 \$3 \$9 \$14 \$3 \$12 \$3 \$2 \$8 -\$15 \$3 \$15 \$3 \$1 \$5 -\$3Monopoly: To get more Quantity must lower price
51. 51. Perfect Competition Demand
52. 52. Perfect Competition Demand = MR
53. 53. Monopoly Demand MR
54. 54. Price Qty TR MR Lose Gain MonopolyPrice \$5 \$4 \$3 \$2 Demand \$1 \$0 1 2 3 4 5 Qty
55. 55. Price Qty TR MR Lose Gain Monopoly \$5 1Price \$5 \$4 \$3 \$2 Demand \$1 \$0 1 2 3 4 5 Qty
56. 56. Price Qty TR MR Lose Gain Monopoly \$5 1 \$5Price \$5 \$4 \$3 \$2 Demand \$1 \$0 1 2 3 4 5 Qty
57. 57. Price Qty TR MR Lose Gain Monopoly \$5 1 \$5 \$5Price \$5 \$4 \$3 \$2 Demand \$1 \$0 1 2 3 4 5 Qty
58. 58. Price Qty TR MR Lose Gain Monopoly \$5 1 \$5 \$5 \$4 2Price \$5 \$4 \$3 \$2 Demand \$1 \$0 1 2 3 4 5 Qty
59. 59. Price Qty TR MR Lose Gain Monopoly \$5 1 \$5 \$5 \$4 2 \$8Price \$5 \$4 \$3 \$2 Demand \$1 \$0 1 2 3 4 5 Qty
60. 60. Price Qty TR MR Lose Gain Monopoly \$5 1 \$5 \$5 \$4 2 \$8 \$3Price \$5 \$4 \$3 \$2 Demand \$1 \$0 1 2 3 4 5 Qty
61. 61. Price Qty TR MR Lose Gain Monopoly \$5 1 \$5 \$5 \$4 2 \$8 \$3Price \$5 \$4 \$3 \$2 Demand \$1 \$0 1 2 3 4 5 Qty
62. 62. Price Qty TR MR Lose Gain Monopoly \$5 1 \$5 \$5 \$4 2 \$8 \$3Price \$5 \$4 \$3 \$2 Demand \$1 \$0 1 2 3 4 5 Qty
63. 63. Price Qty TR MR Lose Gain Monopoly \$5 1 \$5 \$5 \$4 2 \$8 \$3 -\$1Price \$5 Lose \$4 \$3 \$2 Demand \$1 \$0 1 2 3 4 5 Qty
64. 64. Price Qty TR MR Lose Gain Monopoly \$5 1 \$5 \$5 \$4 2 \$8 \$3 -\$1 \$4Price \$5 Lose \$4 \$3 Gain \$2 Demand \$1 \$0 1 2 3 4 5 Qty
65. 65. Price Qty TR MR Lose Gain Monopoly \$5 1 \$5 \$5 \$4 2 \$8 \$3 -\$1 \$4Price \$5 Lose \$4 \$3 Gain \$2 Demand \$1 \$0 1 2 3 4 5 Qty
66. 66. Price Qty TR MR Lose Gain Monopoly \$5 1 \$5 \$5 \$4 2 \$8 \$3 -\$1 \$4Price \$5 Lose \$4 \$3 Gain \$2 Demand \$1 \$0 1 2 3 4 5 Qty
67. 67. Price Qty TR MR Lose Gain Monopoly \$5 1 \$5 \$5 \$4 2 \$8 \$3 -\$1 \$4Price \$5 \$4 \$3 \$2 Demand \$1 \$0 1 2 3 4 5 Qty
68. 68. Price Qty TR MR Lose Gain Monopoly \$5 1 \$5 \$5 \$4 2 \$8 \$3 -\$1 \$4Price \$3 3 \$5 \$4 \$3 \$2 Demand \$1 \$0 1 2 3 4 5 Qty
69. 69. Price Qty TR MR Lose Gain Monopoly \$5 1 \$5 \$5 \$4 2 \$8 \$3 -\$1 \$4Price \$3 3 \$9 \$5 \$4 \$3 \$2 Demand \$1 \$0 1 2 3 4 5 Qty
70. 70. Price Qty TR MR Lose Gain Monopoly \$5 1 \$5 \$5 \$4 2 \$8 \$3 -\$1 \$4Price \$3 3 \$9 \$1 \$5 \$4 \$3 \$2 Demand \$1 \$0 1 2 3 4 5 Qty
71. 71. Price Qty TR MR Lose Gain Monopoly \$5 1 \$5 \$5 \$4 2 \$8 \$3 -\$1 \$4Price \$3 3 \$9 \$1 -\$2 \$5 \$4 Lose \$3 \$2 Demand \$1 \$0 1 2 3 4 5 Qty
72. 72. Price Qty TR MR Lose Gain Monopoly \$5 1 \$5 \$5 \$4 2 \$8 \$3 -\$1 \$4Price \$3 3 \$9 \$1 -\$2 \$3 \$5 \$4 Lose \$3 \$2 Gain Demand \$1 \$0 1 2 3 4 5 Qty
73. 73. Price Qty TR MR Lose Gain Monopoly \$5 1 \$5 \$5 \$4 2 \$8 \$3 -\$1 \$4Price \$3 3 \$9 \$1 -\$2 \$3 \$5 \$4 \$3 \$2 Demand \$1 \$0 1 2 3 4 5 Qty
74. 74. Price Qty TR MR Lose Gain Monopoly \$5 1 \$5 \$5 \$4 2 \$8 \$3 -\$1 \$4Price \$3 3 \$9 \$1 -\$2 \$3 \$5 \$2 4 \$4 \$3 \$2 Demand \$1 \$0 1 2 3 4 5 Qty
75. 75. Price Qty TR MR Lose Gain Monopoly \$5 1 \$5 \$5 \$4 2 \$8 \$3 -\$1 \$4Price \$3 3 \$9 \$1 -\$2 \$3 \$5 \$2 4 \$8 \$4 \$3 \$2 Demand \$1 \$0 1 2 3 4 5 Qty
76. 76. Price Qty TR MR Lose Gain Monopoly \$5 1 \$5 \$5 \$4 2 \$8 \$3 -\$1 \$4Price \$3 3 \$9 \$1 -\$2 \$3 \$5 \$2 4 \$8 -\$1 \$4 \$3 \$2 Demand \$1 \$0 1 2 3 4 5 Qty
77. 77. Price Qty TR MR Lose Gain Monopoly \$5 1 \$5 \$5 \$4 2 \$8 \$3 -\$1 \$4Price \$3 3 \$9 \$1 -\$2 \$3 \$5 \$2 4 \$8 -\$1 -\$3 \$4 \$3 Lose \$2 Demand \$1 \$0 1 2 3 4 5 Qty
78. 78. Price Qty TR MR Lose Gain Monopoly \$5 1 \$5 \$5 \$4 2 \$8 \$3 -\$1 \$4Price \$3 3 \$9 \$1 -\$2 \$3 \$5 \$2 4 \$8 -\$1 -\$3 \$2 \$4 \$3 Lose \$2 Demand Gain \$1 \$0 1 2 3 4 5 Qty
79. 79. Price Qty TR MR Lose Gain Monopoly \$5 1 \$5 \$5 \$4 2 \$8 \$3 -\$1 \$4Price \$3 3 \$9 \$1 -\$2 \$3 \$5 \$2 4 \$8 -\$1 -\$3 \$2 \$4 \$3 \$2 Demand \$1 \$0 1 2 3 4 5 Qty
80. 80. Price Qty TR MR Lose Gain Monopoly \$5 1 \$5 \$5 \$4 2 \$8 \$3 -\$1 \$4Price \$3 3 \$9 \$1 -\$2 \$3 \$5 \$2 4 \$8 -\$1 -\$3 \$2 \$4 \$1 5 \$3 \$2 Demand \$1 \$0 1 2 3 4 5 Qty
81. 81. Price Qty TR MR Lose Gain Monopoly \$5 1 \$5 \$5 \$4 2 \$8 \$3 -\$1 \$4Price \$3 3 \$9 \$1 -\$2 \$3 \$5 \$2 4 \$8 -\$1 -\$3 \$2 \$4 \$1 5 \$5 \$3 \$2 Demand \$1 \$0 1 2 3 4 5 Qty
82. 82. Price Qty TR MR Lose Gain Monopoly \$5 1 \$5 \$5 \$4 2 \$8 \$3 -\$1 \$4Price \$3 3 \$9 \$1 -\$2 \$3 \$5 \$2 4 \$8 -\$1 -\$3 \$2 \$4 \$1 5 \$5 -\$3 \$3 \$2 Demand \$1 \$0 1 2 3 4 5 Qty
83. 83. Price Qty TR MR Lose Gain Monopoly \$5 1 \$5 \$5 \$4 2 \$8 \$3 -\$1 \$4Price \$3 3 \$9 \$1 -\$2 \$3 \$5 \$2 4 \$8 -\$1 -\$3 \$2 \$4 \$1 5 \$5 -\$3 -\$4 \$3 \$2 Lose Demand \$1 \$0 1 2 3 4 5 Qty
84. 84. Price Qty TR MR Lose Gain Monopoly \$5 1 \$5 \$5 \$4 2 \$8 \$3 -\$1 \$4Price \$3 3 \$9 \$1 -\$2 \$3 \$5 \$2 4 \$8 -\$1 -\$3 \$2 \$4 \$1 5 \$5 -\$3 -\$4 \$1 \$3 \$2 Lose Demand \$1 Gain \$0 1 2 3 4 5 Qty
85. 85. Price Qty TR MR Lose Gain Monopoly \$5 1 \$5 \$5 \$4 2 \$8 \$3 -\$1 \$4Price \$3 3 \$9 \$1 -\$2 \$3 \$5 \$2 4 \$8 -\$1 -\$3 \$2 \$4 \$1 5 \$5 -\$3 -\$4 \$1 \$3 \$2 Demand \$1 \$0 1 2 3 4 5 Qty
86. 86. Price Qty TR MR Lose Gain Monopoly \$5 1 \$5 \$5 \$4 2 \$8 \$3 -\$1 \$4Price \$3 3 \$9 \$1 -\$2 \$3 \$5 \$2 4 \$8 -\$1 -\$3 \$2 \$4 \$1 5 \$5 -\$3 -\$4 \$1 \$3 \$2 Demand \$1 \$0 1 2 3 4 5 Qty
87. 87. Price Qty TR MR Lose Gain Monopoly \$5 1 \$5 \$5 \$4 2 \$8 \$3 -\$1 \$4Price \$3 3 \$9 \$1 -\$2 \$3 \$5 \$2 4 \$8 -\$1 -\$3 \$2 \$4 \$1 5 \$5 -\$3 -\$4 \$1 \$3 \$2 Demand \$1 \$0 1 2 3 4 5 Qty
88. 88. Price Qty TR MR Lose Gain Monopoly \$5 1 \$5 \$5 \$4 2 \$8 \$3 -\$1 \$4Price \$3 3 \$9 \$1 -\$2 \$3 \$5 \$2 4 \$8 -\$1 -\$3 \$2 \$4 \$1 5 \$5 -\$3 -\$4 \$1 \$3 \$2 Demand \$1 \$0 1 2 3 4 5 Qty
89. 89. Price Qty TR MR Lose Gain Monopoly \$5 1 \$5 \$5 \$4 2 \$8 \$3 -\$1 \$4Price \$3 3 \$9 \$1 -\$2 \$3 \$5 \$2 4 \$8 -\$1 -\$3 \$2 \$4 \$1 5 \$5 -\$3 -\$4 \$1 \$3 \$2 Demand \$1 \$0 1 2 3 4 5 Qty
90. 90. Price Qty TR MR Lose Gain Monopoly \$5 1 \$5 \$5 \$4 2 \$8 \$3 -\$1 \$4Price \$3 3 \$9 \$1 -\$2 \$3 \$5 \$2 4 \$8 -\$1 -\$3 \$2 \$4 \$1 5 \$5 -\$3 -\$4 \$1 \$3 \$2 Demand \$1 \$0 1 2 3 4 5 Qty Marginal Revenue MR
91. 91. Monopoly\$ Q
92. 92. Monopoly\$ Demand Q
93. 93. Monopoly\$ Demand Marginal Revenue MR Q
94. 94. Monopoly\$ Marginal Cost MC Demand Marginal Revenue MR Q
95. 95. Monopoly\$ Marginal Cost MC 1. MR=MC? Demand Marginal Revenue MR Q
96. 96. Monopoly\$ Marginal Cost MC 1. MR=MC? Demand Marginal Revenue MR Q
97. 97. Monopoly\$ Marginal Cost MC 1. MR=MC? Demand Marginal Revenue MR Q Q
98. 98. Monopoly\$ Marginal Cost MC 1. MR=MC?P Demand Marginal Revenue MR Q Q
99. 99. Monopoly\$ Marginal Cost MC 1. MR=MC?P 2. TR= P x Q Demand Marginal Revenue MR Q Q
100. 100. Monopoly\$ Marginal Cost MC Average Cost ATC 1. MR=MC?P 2. TR= P x Q Demand Marginal Revenue MR Q Q
101. 101. Monopoly\$ Marginal Cost MC Average Cost ATC 1. MR=MC?P 2. TR= P x Q 3. TC=ATC x Q Demand Marginal Revenue MR Q Q
102. 102. Monopoly\$ Marginal Cost MC Average Cost ATC 1. MR=MC?P 2. TR= P x Q 3. TC=ATC x Q Demand Marginal Revenue MR Q Q
103. 103. Monopoly\$ Marginal Cost MC Average Cost ATC 1. MR=MC?P 2. TR= P x Q 3. TC=ATC x Q Demand Marginal Revenue MR Q Q
104. 104. Monopoly\$ Marginal Cost MC Average Cost ATC 1. MR=MC?P 2. TR= P x Q 3. TC=ATC x Q Demand Marginal Revenue MR Q Q
105. 105. Monopoly\$ Marginal Cost MC Average Cost ATC 1. MR=MC?P 2. TR= P x Q 3. TC=ATC x Q Cost Demand Marginal Revenue MR Q Q
106. 106. Monopoly\$ Marginal Cost MC Average Cost ATC 1. MR=MC?P 2. TR= P x Q 3. TC=ATC x Q 4. Proﬁt =TR-TC or (P-ATC) x Q Cost Demand Marginal Revenue MR Q Q
107. 107. Monopoly\$ Marginal Cost MC Average Cost ATC 1. MR=MC?P 2. TR= P x Q 3. TC=ATC x Q 4. Proﬁt =TR-TC or (P-ATC) x Q Cost Demand Marginal Revenue MR Q Q
108. 108. Monopoly\$ Marginal Cost MC Average Cost ATC 1. MR=MC?P Proﬁt 2. TR= P x Q 3. TC=ATC x Q 4. Proﬁt =TR-TC or (P-ATC) x Q Cost Demand Marginal Revenue MR Q Q
109. 109. Monopoly\$ Marginal Cost MC Average Cost ATC 1. MR=MC?P Proﬁt 2. TR= P x Q 3. TC=ATC x Q 4. Proﬁt =TR-TC or (P-ATC) x Q Cost Demand Marginal Revenue MR Q Q
110. 110. Monopoly\$ Marginal Cost Consumer MC Average Cost Surplus ATC 1. MR=MC?P Proﬁt 2. TR= P x Q 3. TC=ATC x Q 4. Proﬁt =TR-TC or (P-ATC) x Q Cost Demand Marginal Revenue MR Q Q
111. 111. Monopoly\$ Marginal Cost Consumer MC Average Cost Surplus ATC 1. MR=MC?P Proﬁt 2. TR= P x Q 3. TC=ATC x Q 4. Proﬁt =TR-TC or (P-ATC) x Q Cost Demand Marginal Revenue MR Q Q
112. 112. Monopoly\$ Marginal Cost Consumer MC Average Cost Surplus ATC Deadweight 1. MR=MC?P Loss Proﬁt 2. TR= P x Q 3. TC=ATC x Q 4. Proﬁt =TR-TC or (P-ATC) x Q Cost Demand Marginal Revenue MR Q Q
113. 113. Antitrust Laws
114. 114. Antitrust LawsCollusion Felony