L8 Monopoly & Gov

L8 Monopoly & Gov - Chapter 9: Monopoly, Oligopoly,...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
1 • First in-class exam on Wednesday, Jan 28 • Exam cover Chapters 7 and 9 • Answers to practice exam will be reviewed in discussion sections between Wednesday, Jan 21 and Monday, Jan 26 Chapter 9: Monopoly, Oligopoly, and Monopolistic Competition I. Where does monopoly or oligopoly come from? 1. Cartels or producer co-operatives Problems: illegal in U.S. and incentive to cheat 2. Mergers or acquisitions Problems with merging to create monopoly: (1) The merger can be challenged by U.S. Department of Justice or Federal Trade Commission Celler-Kefauver amendment to Clayton Act (1950): Prohibits mergers or acquisitions that would reduce competition • 1997: FTC blocked merger of Office Depot with Staples • 2000: U.S. Department of Justice blocked merger of WorldCom and Sprint • 1999: FTC approved the merger of Mobil and Exxon Problems with merging to create monopoly: (1) The merger can be challenged by U.S. Department of Justice or Federal Trade Commission (2) If you act as a monopoly, new competitors will appear
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
2 demand Marginal cost Marginal cost MR P1 Q1 Monopolist chooses (Q1,P1) Price Quantity Price Quantity P1 Q2 A small competitor sees P1 > MC and it wants to enter too A tomato farm is not that hard to start Conclusion: a successful monopoly or
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 6

L8 Monopoly & Gov - Chapter 9: Monopoly, Oligopoly,...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online