Varieties of Monopoly
A monopoly that enjoys the protection of legal restrictions on competition.
Marginal revenue for a monopolist will always be steeper and below this curve.
What is a demand curve?
The practice of setting a product or service price at a level just low enough to deter potential market entrants from competing in a market.
What is limit pricing?
What is shut down?
If marginal revenue is negative this must be happening to total revenue.
What is falling?
A type of monopoly that exists typically due to the high start-up costs or powerful economies of scale.
What is a natural monopoly?
The profit-maximizing rule for a monopolist.
What is producing where marginal revenue equals marginal cost?
When a seller can charge different customers that are basically identical different prices in an attempt to extract as much profit as possible.
What is price discrimination?
If the monopolist is able to produce where price is below its average total cost but above its average variable cost it will still be able to make this type of profit.
What is operating profit?
If marginal revenue is falling but is still positive this must be happening to total revenue.
What is increasing?
An existing monopolist captures the major section of the society by dominating the market but enjoys no legal protection from competition.
What is open monopoly?
A monopolist always faces this entire curve.
What is the demand curve?
A form of pricing in which consumers are charged both an entry fee (fixed price) and a usage fee (per-unit price).
What is two-part pricing?
If the monopolist is able to charge a price that is above its average total cost it will be able to enjoy this type of profit.
What is pure economic profit?
If marginal revenue for a monopolist is greater than its marginal cost, what is true about what the monopolist must do.
What is increase production?
A firm that faces a negatively sloped demand curve has this type of power?
What is a price maker?
The characteristic that differentiates a monopoly from pure competition has to do with the fact that entry for the monopolist is this.
What is blocked entry?
The part of a two-part pricing strategy paid for the right to become a customer.
What is an access fee?
If the monopolist is able to charge a price that is just equal to its average total cost then it will be able to enjoy this type of profit.
What is normal profit.
If the marginal cost of production for a monopolist is greater than the marginal revenue then what is true about what the monopolist must do?
What is cut back production?
What is a simple monopoly?
If the average cost curve for a monopolist is above the demand curve then what will be true about its profits?
What are negative profits?
In a two-part pricing strategy, the per-unit price offered to qualified customers who have paid the access fee.
What is a user charge?
Monopolies are never guaranteed to earn this.
What are economic profits?
The monopolist will never produce in this range of the demand curve.
What is the inelastic portion of the demand curve?