Monopoly

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Monopoly

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  • Perfect Competition\n\nIn this video we’re going to talk about Perfect Competition.\n\nFirst we’ll draw and label our price-quantity graph.\n\nThen we’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 “At what level should we produce to maximize profits?” We always answer this question with the equation MR=MC.\nSo we need to see a marginal cost curve. This curve is a “U-shape” 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’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’t forget you can rewind this video to make sure you understand how the graph works.\n
  • Perfect Competition\n\nIn this video we’re going to talk about Perfect Competition.\n\nFirst we’ll draw and label our price-quantity graph.\n\nThen we’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 “At what level should we produce to maximize profits?” We always answer this question with the equation MR=MC.\nSo we need to see a marginal cost curve. This curve is a “U-shape” 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’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’t forget you can rewind this video to make sure you understand how the graph works.\n
  • Perfect Competition\n\nIn this video we’re going to talk about Perfect Competition.\n\nFirst we’ll draw and label our price-quantity graph.\n\nThen we’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 “At what level should we produce to maximize profits?” We always answer this question with the equation MR=MC.\nSo we need to see a marginal cost curve. This curve is a “U-shape” 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’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’t forget you can rewind this video to make sure you understand how the graph works.\n
  • Perfect Competition\n\nIn this video we’re going to talk about Perfect Competition.\n\nFirst we’ll draw and label our price-quantity graph.\n\nThen we’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 “At what level should we produce to maximize profits?” We always answer this question with the equation MR=MC.\nSo we need to see a marginal cost curve. This curve is a “U-shape” 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’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’t forget you can rewind this video to make sure you understand how the graph works.\n
  • Perfect Competition\n\nIn this video we’re going to talk about Perfect Competition.\n\nFirst we’ll draw and label our price-quantity graph.\n\nThen we’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 “At what level should we produce to maximize profits?” We always answer this question with the equation MR=MC.\nSo we need to see a marginal cost curve. This curve is a “U-shape” 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’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’t forget you can rewind this video to make sure you understand how the graph works.\n
  • Perfect Competition\n\nIn this video we’re going to talk about Perfect Competition.\n\nFirst we’ll draw and label our price-quantity graph.\n\nThen we’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 “At what level should we produce to maximize profits?” We always answer this question with the equation MR=MC.\nSo we need to see a marginal cost curve. This curve is a “U-shape” 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’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’t forget you can rewind this video to make sure you understand how the graph works.\n
  • Perfect Competition\n\nIn this video we’re going to talk about Perfect Competition.\n\nFirst we’ll draw and label our price-quantity graph.\n\nThen we’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 “At what level should we produce to maximize profits?” We always answer this question with the equation MR=MC.\nSo we need to see a marginal cost curve. This curve is a “U-shape” 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’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’t forget you can rewind this video to make sure you understand how the graph works.\n
  • Perfect Competition\n\nIn this video we’re going to talk about Perfect Competition.\n\nFirst we’ll draw and label our price-quantity graph.\n\nThen we’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 “At what level should we produce to maximize profits?” We always answer this question with the equation MR=MC.\nSo we need to see a marginal cost curve. This curve is a “U-shape” 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’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’t forget you can rewind this video to make sure you understand how the graph works.\n
  • Perfect Competition\n\nIn this video we’re going to talk about Perfect Competition.\n\nFirst we’ll draw and label our price-quantity graph.\n\nThen we’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 “At what level should we produce to maximize profits?” We always answer this question with the equation MR=MC.\nSo we need to see a marginal cost curve. This curve is a “U-shape” 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’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’t forget you can rewind this video to make sure you understand how the graph works.\n
  • Perfect Competition\n\nIn this video we’re going to talk about Perfect Competition.\n\nFirst we’ll draw and label our price-quantity graph.\n\nThen we’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 “At what level should we produce to maximize profits?” We always answer this question with the equation MR=MC.\nSo we need to see a marginal cost curve. This curve is a “U-shape” 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’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’t forget you can rewind this video to make sure you understand how the graph works.\n
  • Perfect Competition\n\nIn this video we’re going to talk about Perfect Competition.\n\nFirst we’ll draw and label our price-quantity graph.\n\nThen we’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 “At what level should we produce to maximize profits?” We always answer this question with the equation MR=MC.\nSo we need to see a marginal cost curve. This curve is a “U-shape” 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’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’t forget you can rewind this video to make sure you understand how the graph works.\n
  • Perfect Competition\n\nIn this video we’re going to talk about Perfect Competition.\n\nFirst we’ll draw and label our price-quantity graph.\n\nThen we’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 “At what level should we produce to maximize profits?” We always answer this question with the equation MR=MC.\nSo we need to see a marginal cost curve. This curve is a “U-shape” 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’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’t forget you can rewind this video to make sure you understand how the graph works.\n
  • Perfect Competition\n\nIn this video we’re going to talk about Perfect Competition.\n\nFirst we’ll draw and label our price-quantity graph.\n\nThen we’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 “At what level should we produce to maximize profits?” We always answer this question with the equation MR=MC.\nSo we need to see a marginal cost curve. This curve is a “U-shape” 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’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’t forget you can rewind this video to make sure you understand how the graph works.\n
  • Perfect Competition\n\nIn this video we’re going to talk about Perfect Competition.\n\nFirst we’ll draw and label our price-quantity graph.\n\nThen we’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 “At what level should we produce to maximize profits?” We always answer this question with the equation MR=MC.\nSo we need to see a marginal cost curve. This curve is a “U-shape” 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’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’t forget you can rewind this video to make sure you understand how the graph works.\n
  • Perfect Competition\n\nIn this video we’re going to talk about Perfect Competition.\n\nFirst we’ll draw and label our price-quantity graph.\n\nThen we’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 “At what level should we produce to maximize profits?” We always answer this question with the equation MR=MC.\nSo we need to see a marginal cost curve. This curve is a “U-shape” 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’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’t forget you can rewind this video to make sure you understand how the graph works.\n
  • Perfect Competition\n\nIn this video we’re going to talk about Perfect Competition.\n\nFirst we’ll draw and label our price-quantity graph.\n\nThen we’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 “At what level should we produce to maximize profits?” We always answer this question with the equation MR=MC.\nSo we need to see a marginal cost curve. This curve is a “U-shape” 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’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’t forget you can rewind this video to make sure you understand how the graph works.\n
  • Perfect Competition\n\nIn this video we’re going to talk about Perfect Competition.\n\nFirst we’ll draw and label our price-quantity graph.\n\nThen we’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 “At what level should we produce to maximize profits?” We always answer this question with the equation MR=MC.\nSo we need to see a marginal cost curve. This curve is a “U-shape” 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’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’t forget you can rewind this video to make sure you understand how the graph works.\n
  • Perfect Competition\n\nIn this video we’re going to talk about Perfect Competition.\n\nFirst we’ll draw and label our price-quantity graph.\n\nThen we’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 “At what level should we produce to maximize profits?” We always answer this question with the equation MR=MC.\nSo we need to see a marginal cost curve. This curve is a “U-shape” 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’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’t forget you can rewind this video to make sure you understand how the graph works.\n
  • Perfect Competition\n\nIn this video we’re going to talk about Perfect Competition.\n\nFirst we’ll draw and label our price-quantity graph.\n\nThen we’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 “At what level should we produce to maximize profits?” We always answer this question with the equation MR=MC.\nSo we need to see a marginal cost curve. This curve is a “U-shape” 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’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’t forget you can rewind this video to make sure you understand how the graph works.\n
  • Perfect Competition\n\nIn this video we’re going to talk about Perfect Competition.\n\nFirst we’ll draw and label our price-quantity graph.\n\nThen we’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 “At what level should we produce to maximize profits?” We always answer this question with the equation MR=MC.\nSo we need to see a marginal cost curve. This curve is a “U-shape” 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’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’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
    9. 9. PatentsCopyrights
    10. 10. Patents 20 Years CopyrightsLifetime plus 70 Years
    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

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