14158610-Math-135-Project - Math 135 Business Calculus...

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Unformatted text preview: Math 135 Business Calculus Spring 2009 Project: Monopoly Pricing Due Monday, April 20 Introduction When there is only one firm that produces a certain product, that one firm is called a monopoly. Monopolies are familiar to most consumers. Local phone service and electric power are often provided by monopolies. Monopolists have the advantage over firms that must compete since, without regulation, they might have the ability to control the price of their service by controlling the quantity produced. A product that is in short supply will fetch a high price if people are demanding that product. Conversely, if the product is easy to come by, the price of it will be low. Monopolies could be detrimental to the consumer if they were interested not in providing enough of their product for everyone but in providing just enough to maximize their profits. Some local monopolies that have received a lot of attention are cable TV franchises. People have been dissatisfied with having to pay extra fees for special cable channels. The question of regulating the cable companies has been a matter of some concern. In this project, you will be able to examine how monopolies set prices and answer for yourself whether or not the cable companies should be regulated by the government....
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14158610-Math-135-Project - Math 135 Business Calculus...

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