Monopoly
What is monopoly?
A situation in which one firm produces all of the output in the market.
Trademark?
An identifying symbol or name for a particular good and can only be used by the firm that registered that trademark
How do you suppose the "barriers to entry" were weakened?
The Aluminum Company of America controlled most of the supply of bauxite, a key mineral used in making aluminum.
What is predatory pricing?
A term used to describe a pricing strategy used by a dominating corporation in a market to eliminate or discourage potential competitors.
Total Revenue?
TR = PQ
What is Legal monopoly?
Legal prohibitions against competition, such as regulated monopolies and intellectual property protection.
Trade secrets?
Methods of production kept secret by the producing firm
Why are generic pharmaceuticals significantly cheaper than name brand ones?
Generic pharmaceuticals are not protected by the patent.
What legal mechanisms protect intellectual property?
Copyright, trademarks, Patents and Trade secrets
Average Revenue?
TR / Q = PQ / Q = P
What is Natural monopoly?
Economic conditions in the industry, for example, economies of scale or control of a critical resource, that limit effective competition.
Intellectual property?
The body of law including patents, trademarks, copyrights, and trade secret law that protect the right of inventors to produce and sell their inventions
If a monopoly firm is earning profits, how much would you expect these profits to be diminished by entry in the long run?
Over the long haul the monopolist keeps on acquiring comparable benefits because of enough market power and the hindrances to passage.
Is a monopolist a price taker?
A monopolist is not a price taker, to be clear. In actuality, the capacity to exert control over the pricing of its goods or services is one of the traits that distinguishes a monopolist. Unlike in a market with perfect competition, where businesses are price takers
Marginal Revenue?
Change TR / Change Q
What are the barriers to entry?
The legal, technological, or market forces that may discourage or prevent potential competitors from entering a market.
Marginal Profit?
Profit of one more unit of output, computed as marginal revenue minus marginal cost
How does a monopoly impact small businesses and entrepreneurship?
When a monopoly dominates a market, it becomes increasingly difficult for new entrants to compete and establish themselves. Monopolies often have substantial resources and can engage in anti-competitive practices to deter or eliminate competition.
Is a monopolist allocatively efficient?
A monopolist is generally not considered allocatively efficient in the context of economic efficiency. Allocative efficiency refers to a situation where resources are allocated in a manner that maximizes overall societal welfare.
Golden Rule?
What is Patent?
A government rule that gives the inventor the exclusive legal right to make, use, or sell the invention for a limited time.
Copyright?
A form of legal protection to prevent copying, for commercial purposes, of original works of authorship, including books and music
How does a monopoly impact consumer choice and variety of products?
A monopoly can significantly limit consumer choice and variety of products. With no competitors in the market, consumers are often left with limited options, and the monopolistic firm has control over what products or services are available.
How is monopoly different from perfect competition?
Number of Firms: In perfect competition, there are a large number of firms competing in the market. On the other hand, a monopoly exists when there is only one dominant firm in the market.
Pi?
(P - ATc) Q