Chapter25

Chapter25 - Economics 101 Chapter 25 I Monopoly Markets...

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10/1/2007 Economics 101 Chapter 25 I) Monopoly Markets monopoly definition: a firm that is the lone producer of a good for which there are no close substitutes - ex: public utilities market power - a firm’s ability to alter the price of its output because of inadequate competition or a lack of perfect substitutes for its products - any firm with market power is a price maker II) Monopoly Pricing and Output Revenue and Elasticity, Profit-Maximizing, Price and Output, Loss- Minimizing Price and Output - page 566-568 X-ineffiency - excessive costs incurred because a firm is not hard pressed by competitors Barriers to Entry - definition: obstacles that make it less profitable or more difficult for new firms to enter an industry - regulatory barriers to entry are erected by government policies (i) ex: auto safety standards increase per unit costs, posing obstacles for potential entrants to the car market who want to produce cheap cars - strategic barriers raise the costs of entry and result from the policies of
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This note was uploaded on 04/06/2010 for the course ECON 101 taught by Professor Balaban during the Spring '07 term at UNC.

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Chapter25 - Economics 101 Chapter 25 I Monopoly Markets...

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