Monopoly is a market structure where there is only one seller of a product or service. Examples include public utilities like electricity and water.
Under monopoly, the firm faces a downward sloping demand curve and sets a price where marginal revenue equals marginal cost to maximize profits. This price is generally higher and quantity lower than under perfect competition.
Price discrimination is when a monopolist charges different prices to different customers, even though the cost of production is the same. It allows a firm to extract more consumer surplus. Conditions for effective price discrimination include the ability to segment markets and prevent resale.
In a monopoly market, factors like government license, ownership of resources, copyright and patent and high starting cost make an entity a single seller of goods. All these factors restrict the entry of other sellers in the market. Monopolies also possess some information that is not known to other sellers.
This PPT includes Oligopoly Market. It is explained in detail.
This is for educational purpose only. If you own any of the content please let me know. We are not here to hurt anyone's emotion. Please try to co-operate and use this for educational purposes only.
In a monopoly market, factors like government license, ownership of resources, copyright and patent and high starting cost make an entity a single seller of goods. All these factors restrict the entry of other sellers in the market. Monopolies also possess some information that is not known to other sellers.
This PPT includes Oligopoly Market. It is explained in detail.
This is for educational purpose only. If you own any of the content please let me know. We are not here to hurt anyone's emotion. Please try to co-operate and use this for educational purposes only.
Equilibrium of Firm Under Perfect CompetitionPiyush Kumar
The ppt incorporates lots of animations for clear explanation on graphs and curves, it's better to download it first and then surely you will be cherished with it
Monopoly is a pivotal area to the study of market structures, which directly concerns normative aspects of economic competition, and sets the foundations for fields such as industrial organization and economics of regulation. There are four basic types of market structures under traditional economic analysis: perfect competition, monopolistic competition, oligopoly and monopoly...
Equilibrium of Firm Under Perfect CompetitionPiyush Kumar
The ppt incorporates lots of animations for clear explanation on graphs and curves, it's better to download it first and then surely you will be cherished with it
Monopoly is a pivotal area to the study of market structures, which directly concerns normative aspects of economic competition, and sets the foundations for fields such as industrial organization and economics of regulation. There are four basic types of market structures under traditional economic analysis: perfect competition, monopolistic competition, oligopoly and monopoly...
what is monopoly, its characteristics, probable cause & equilibrium price and output in short n long run.
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Profit and loss aptitude questions and answersMydear student
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The Long Run 4C Call webinar series: Huilo Huilo Biological Reserve Community...The Long Run
The 4C Call series invites The Long Run members and supporters to present webinars on issues and challenges addressed in the #4Cs for sustainable development: #Conservation, #Community, #Culture and #Commerce.
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ECON 1102 Test 4 (120414) ECON 1102 Test 4 Do all 40.docxjack60216
ECON 1102 Test 4 (120414)
ECON 1102: Test 4
Do all 40 questions
Use the table below, which gives the demand for a monopolist’s output, to answer questions 1, 2 and 3.
Quantity
(units)
Price
(dollars per unit)
1 8
2 7
3 6
4 5
5 4
6 3
1) Between which two quantities is marginal revenue equal to 2?
A) 4 and 5
B) 3 and 4
C) 2 and 3
D) 1 and 2
2) Between which two quantities is demand inelastic?
A) 6 and 5
B) 5 and 4
C) 4 and 3
D) 3 and 2
3) What is the marginal revenue when output is increased from 5 to 6 units?
A) $18
B) $4
C) $3
D) -$2
4) A single-price monopoly
A) charges all consumers the lowest price that they want to pay for each unit purchased.
B) produces less output than it would if it could price discriminate.
C) eliminates all the consumer surplus.
D) creates a smaller deadweight loss than it would if it could price discriminate.
5) A single-price monopolist determines
A) its output but not its price.
B) its price but not its output.
C) both its output and its price.
D) neither its output nor its price.
6) In monopolistic competition, the presence of a large number of firms making a differentiated product
means that
A) each firm has some ability to effect the price of its particular good or service.
B) each firm must charge the same price.
C) the price is established by agreements among the different firms.
D) each firm must produce the same quantity.
7) Firms in monopolistic competition have rivals that
A) match their price increases.
B) match their price decreases.
C) agree on a common price.
D) set their prices according to the demand curves they face.
ECON 1102 Test 4 (120414)
8) When firms in monopolistic competition are making an economic profit, firms will
A) enter the industry, and demand will increase for the original firms.
B) exit the industry, and demand will increase for the firms that remain.
C) exit the industry, and demand will decrease for the firms that remain.
D) enter the industry, and demand will decrease for the original firms.
9) Firms in monopolistic competition charge prices that are ________ those of the other firms in the market.
A) close to
B) very different from
C) the same as
D) completely unrelated to
10) A monopolistically competitive firm has ________ power to set the price of its product because
________.
A) no; there are no barriers to entry
B) some; there are barriers to entry
C) no; of product differentiation
D) some; of product differentiation
11) Monopolistically competitive firms and perfectly competitive firms are alike because both types of firms
I. face downward sloping demand curves.
II. have marginal revenue curves that lie beneath their demand curves.
III. can make only zero economic profit in the long run.
A) I and II
B) I and III
C) III only
D) I only
12) Dole Co. operates in a monopolistically competitive market. Whi ...
Research report on phil. housing finance sector of PhilippinesNelsie Grace Pineda
This is a research report I made last year for school requirements.The housing finance sector of Philippines is emphasized here with comprehensive details of housing situation in the country.
I hope this can be of help!
2. What is Monopoly?
It is a market system in which one firm
makes up the whole market.
Pure monopoly = single firm produces a
commodity or service for which there is no
close substitute (no other firms producing
the same product/s varying only in minor
ways from that of the monopolist)
7. Marginal revenue is less than market
price
For products with large fixed cost,
marginal cost is lower than the average
cost and vice versa
industry demand curve is negatively
slope
8.
9. Short Run Equilibrium
1. At what point would I be losing?
2. At what point would I break - even?
3. At what point would I maximize profit?
10. Rules for Monopoly
MR > MC = monopolist earns profit by
increasing output
MR < MC = monopolist earns by
decreasing output
MC = MR = monopolist is maximizing
profit
11. Short run Profit Minimization : Total Curves
400
300
200
100
0
-100
-200
Total Profit
Total Cost
Total Revenue
12. Short run Profit Minimization Per Unit Curves
160
140
MR
120
Demand of Price
100 AC
MC
80
60
40
20
0
-20
15. Less Than the Most Efficient
Size of the Plant
the monopolist market is limited that the
marginal revenue curve cuts the long run
average cost curve (LAC)
16.
17. B. Most Efficient Size of the
Plant
monopolist market and cost curves are
such that the marginal revenue curve hits
the minimum point of the long run
average curve (LAC)
18.
19.
20.
21. What is price discrimination?
The practice of charging different prices
for essentially the same good or service
Why discriminate price?
1. Monopolist can keep the markets apart
2. For it to be effective and profitable
22. Conditions Necessary for
Price Discrimination
The firm must have some degree of monopoly
power — it must be a price setter.
the market must be capable of being fairly
easily segmented—separated so that
customers with different elasticities of demand
can be identified and treated differently.
The various market segments must be isolated
in some way from one another to prevent
customers who are offered a lower price from
selling to customers who are charged a higher
price.
23. Examples of Price
Discrimination
Senior citizens and students are often offered
discount fares on city buses and trains.
Children receive discount prices for movie
theater tickets and entrance fees at zoos and
theme parks.
Faculty and staff at colleges and universities
might receive discounts at the campus
bookstore/cafeteria.
Physicians might charge wealthy patients more
than poor ones.
24. Types of Price Discrimination
First
Degree
price varies
by
customer's
willingness
or ability to
pay
25. Second Degree
price varies
according to
quantity sold
26. Third Degree
price varies by attributes such as location or by
customer segment, or in the most extreme
case, by the individual customer's identity; where
the attribute in question is used as a proxy for
ability/willingness to pay.
27.
28. How Price Discrimination
Affects Output?
How many manuscript should Carla edit?
Student Reservation Price
A $40
B 38
C 36
D 34
E 32
F 30
G 28
H 26
29. Students Reservation Total Revenue Marginal
Price Revenue
A $40 40 40
B 38 76 36
C 36 108 32
D 34 136 28
E 32 160 24
F 30 180 20
G 28 196 16
H 26 208 12
30. If Carla can price – discriminate, how
many papers should she edit?
Student Reservation Price
A $40
B 38
C 36
D 34
E 32
F 30
G 28
H 26
31. Perfectly discriminating monopolist
a firm that charges each buyer exactly his
or her reservation price
Hurdle Method of Discriminating
the practice by which seller offers a
discount to all buyers who overcome some
obstacle
Perfect Hurdle
a threshold that completely segregates
buyers
32. Price Discrimination with Perfect Hurdle
Students Reservation Total Revenue Marginal
Price Revenue
List Price Submarket
A $40 40 40
B 38 76 36
C 36 108 32
Discount Price Submarket
D 34 34 34
E 32 64 30
F 30 90 26
G 28 112 22
H 26 130 18
35. ADVANTAGES TO THE FIRM
Enables producers to gain a higher level
of revenue
Enables producers to produce more and
gain from economies of scale.
Profits gained in inelastic market segment
can be used to drive away competition in
more elastic market segment
36. ADVANTAGES TO THE
CONSUMERS
Poorer consumers may be able to consume
products.
Allows people to purchase a product at a lower
price than they would have had to pay if the
producer had not been able to secure higher
prices from others.
Increased output provides opportunity for more
consumers to use the product.
Economies of scale: If total output increases
significantly, this may result in lower average
cost and thus lower prices for consumers.
37. DISADVANTAGES OF PRICE
DISCRIMINATION
Any consumer surplus that existed before
the price discrimination will be lost.
Some consumers will pay more than the
price that would have been charged in a
single, non discriminated market.
If a firm succeeds in driving rival firms out
from the market, it can use its increased
monopoly power to increase prices and
exploit the consumers.