Chapter 10: Monopoly
REVIEW QUESTIONS
1. A monopolist is producing at a point at which marginal cost exceeds marginal revenue. How should it adjust its output to increase profit?
2. We write the percentage markup of prices over marginal cost as (P - MC)/P. For a profit-maximizing monopolist, how does this markup depend on the elasticity of demand? Why can this markup be viewed as a measure of monopoly power?
lOMoARcPSD|1675695
3. Why is there no market supply curve under conditions of monopoly?
4. Why might a firm have monopoly power even if it is not the only producer in the market?
5. What are some of the sources of monopoly power? Give an example of each.
You've reached the end of your free preview.
Want to read all 7 pages?
- Spring '13
- mr.wong
- Monopoly
