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Unformatted text preview: 1. Firm’s ability to raise the price of a good without losing all its sales. 2. Key features of monopoly (market power) +no substitutes +barriers to entry (sources of market power) (a~c is legal barriers to entry, d is natural barrier to entry) a. Exclusive control over important inputs. b. Patents and copy right and licenses. c. Franchises d. Economic of scale (some industry must be run by one company)-Economic of scale : firm doubles all factors of population. 1. My output level will be more than double. 2. Increasing revenue scale (economies of scale) then average of cost function is decreasing. Network economies: because everyone uses it I am going to use it as well. Single price monopoly : profit maximization for the monopolist. Marginal Revenue : 1. In perfect competition MR=P 2. In monopoly MR<P...
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This note was uploaded on 12/02/2009 for the course ECON econ taught by Professor For got during the Spring '09 term at UCSD.
- Spring '09
- for got