Chapter 11 begining

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

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
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
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

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...
View Full Document

This note was uploaded on 05/03/2009 for the course ECON 251 taught by Professor Blanchard during the Spring '08 term at Purdue.

Ask a homework question - tutors are online