Monopoly Mansion
Profit-maximizing rule?
MR= MC?
Main feature where firms watch each other's moves?
Mutual Interdependence
Making a product look unique via branding/ads?
Product Differentiation
Charging different people different prices for the same exact good?
Price Discrimination
Lost total surplus caused by a monopoly?
Deadweight Loss (DWL)
Why is MR below Demand (D)?
Must lower price on all previous units to sell a new one.
Best strategy no matter what the opponent does?
Dominant Strategy
Long-run economic profit amount?
Zero / Normal profit
What must a firm prevent to make this work?
Resale / Arbitrage
Condition where P = MC?
Allocative Efficiency
What range of demand do they produce in?
Elastic range
Group of firms colluding together?
Cartel
Gap between profit-maximizing output and minimum
Excess Capacity
Consumer surplus in perfect price discrimination?
Zero
Condition where P = minimum ATC?
Productive Efficiency
Single firm has lower costs than multiple firms combined?
Natural Monopoly
Neither player wants to change their strategy alone?
Nash Equilibrium
If short-run profits exist, how does individual firm demand shift in long run?
Shifts Left
Deadweight loss in perfect price discrimination?
Zero
Price ceiling for a "socially optimal" monopoly is where Demand hits what?
Marginal Cost (MC)
What happens to monopoly profits in the long run?
They stay positive (high barriers to entry).
Why do cartels always break down?
Firms have an incentive to cheat.
True or False: They are productively efficient in the long run.
False (Price > minimum ATC)
Does a price-discriminating monopoly produce more or less output than a normal monopoly?
More
Price ceiling for a "fair-return" monopoly leaves how much economic profit?
Zero profit (P = ATC)