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N22-simple monopoly jpw (3)

N22-simple monopoly jpw (3) - microL22-F2010-page...

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Unformatted text preview: microL22-F2010-page http://www.arts.cornell.edu/econ/wissink/econ1110jpw/ Simple Monopoly Lecture 22 Dr. Jennifer P. Wissink ©2009 John M. Abowd and Jennifer P. Wissink, all rights reserved. November 11, 2010 microL22-F2010-page http://www.arts.cornell.edu/econ/wissink/econ1110jpw/ Announcements: Micro S2010 ◆ MyEconLab: – Two new quizzes have been posted. Quiz#09 and another ToCatchUpQuiz. – Check the MEL site for due dates. ◆ Prelim 2: – I hope it went reasonably well. – TAs are busy grading – I hope to have results for you at lecture on Thursday. microL22-F2010-page http://www.arts.cornell.edu/econ/wissink/econ1110jpw/ Sources of Monopoly Entry Barriers ◆ Technical: – Natural monopoly (1) – Vital input ownership (2) – Technical secrets (the better mousetrap) (3) ◆ Legal: – Patents (4) – Franchises (5) – Licenses (6) ◆ Strategic: – Buy ‘em up (7) – Blow ‘em up (8) – Let’s make a deal (9) microL22-F2010-page http://www.arts.cornell.edu/econ/wissink/econ1110jpw/ Natural versus Ordinary Monopoly microL22-F2010-page http://www.arts.cornell.edu/econ/wissink/econ1110jpw/ Monopoly Caveats ◆ monopoly ≠> you’re big ◆ big ≠> you’re a monopoly ◆ monopoly ≠> you have absolute and unlimited control over price ◆ monopoly ≠> you must have positive economic profit ◆ short run profit ≠> monopoly power ◆ monopoly ≠> a badly behaved firm microL22-F2010-page http://www.arts.cornell.edu/econ/wissink/econ1110jpw/ The Classic Monopoly ◆ Polar extreme from perfect competition....
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N22-simple monopoly jpw (3) - microL22-F2010-page...

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