Chapter 11 begining

Chapter 11 begining - to create profit and maintain...

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Chapter 11 Monopoly Characteristics 1. only one seller 2. no close substitutes 3. significant barriers to entry Marginal Revenue is twice as steep as demand If marginal revenue is positive it is elastic MR is 0 at Unit elastic Below that it is in elastic Above that its elastic Profit is TR-TC profit Is Q(Price- ATC) Monopolies have no supply curve Rent seeking behavior- The act of obtaining special treatment by the government
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Unformatted text preview: to create profit and maintain monopolies Economic rent= any payment to a resource in excess of its opp cost Inefficiency of Monopoly Allocative efficiency- using resources at the highest valued use This is when marginal benefit = marginal cost Marginal benefit is the demand curve...
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