Definition of a Monopolist:
A single supplier that comprises its
entire industry for a good or service for which there is no close
substitute.
Barriers to Entry:
For any amount of monopoly power to continue to
exist in the long-run, the market must be closed to entry in some way.
Either legal means or certain aspects of the industry’s technical or cost
structure may prevent entry.
Economies of Scale:
When economies of scale exist firms with larger
output have lower average costs that enable them to charge a lower
price and drive smaller firms out of business.
Natural monopoly
arises when there are large economies of scale
relative to the industry’s demand, and one firm can produce at a lower
average cost than can be achieved by multiple firms.
Licenses, Franchises, and Certificates of Convenience:
In many
industries it is illegal to enter without a government license, or
certificate of convenience and public necessity. Because franchises or
This
preview
has intentionally blurred sections.
Sign up to view the full version.

This is the end of the preview.
Sign up
to
access the rest of the document.
- Fall '11
- Dsilvia
- Economics, Monopoly, Perfect Competition, fi rms, 20 years
-
Click to edit the document details