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Monopoly Table

Monopoly Table - reduced from competitive level 6 The...

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Table 21-1 CHARACTERISTICS OF MONOPOLY FIRMS STRUCTURE ==> CONDUCT ==> PERFORMANCE 1. One producer 1. Firms are price setters 1. P > minimum ATC 2. Barriers to entry 2. Firms need not 2. Firm produces at a exist; barriers to minimize costs to survive point on ATC before exit may exist in the long run the minimum point 3. Firms produce a 3. Advertising may occur 3. P > MC unique product 4. Firm may have secret 4. Firms have no need to 4. Firms can earn or proprietary information collude to obtain market monopoly profit in power long run 5. Firm may have access 5. Firms have market power 5. In the market, to inputs from non- in the product market and consumer surplus is competitive input markets possibly in input markets
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Unformatted text preview: reduced from competitive level 6. The demand curve 6. Compared with competition, 6. Deadweight loss to facing the firm is firms raise price and reduce society occurs downward sloping output and is the market demand curve 7. A market supply curve 7. Firms will exit the industry 7. In the long run, does not exist; firm in the long run if firms are inefficient firms may moves along the taking losses, but P > min AVC, remain market demand curve and exit in the short run by changing price. if P < min AVC 8. The marginal revenue 8. Firms produce where 8. P > MR curve facing the firm is MC = MR downward sloping, lies below the demand curve and has twice the slope...
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Monopoly Table - reduced from competitive level 6 The...

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