topic7web - Chapter 12 Monopoly ch12 Monopoly 1 Monopoly...

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Chapter 12 Monopoly ch12: Monopoly 1
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Monopoly Some introductory questions Question 1: Why is the fast food restaurant next to Beacon Hill park so expensive? Question 2: Why do you often get a discount when showing your student card? Question 3: In the Thrifty’s on Hillside Robin Hood all purpose flour costs the following: 1kg = $2.39; 2.5kg =$4.59; 5kg =$7.49; and 10kg = $8.79. How come the priceper kilogram decreases so drastically? ch12: Monopoly 2
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Organization Setup The sources of monopoly power The monopolist’s problem Solving the monopolist’s problem About the optimal solution: Pricing vs. elasticity Welfare in monopolistic markets Seeking more surplus Part 1: price discrimination First-degree price discrimination Second-degree price discrimination Third-degree price discrimination Seeking more surplus Part 2: bundling goods ch12: Monopoly 3
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Monopoly Greek: monos = single + polein = to sell Where do monopolists come from? What prevents market entry from occurring? What prevents market entry? Exclusive control over crucial inputs Economies of scale AVC decreases natural monopolies Information as an important source of economies of scale Network economies Patents : temporary monopoly rights (currently 20 years) Licensing by governments or other institutions Often with: airports, gas stations at highways, etc. Exclusive license of UVic food service
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This note was uploaded on 08/03/2011 for the course ECON 203 taught by Professor Okhan during the Spring '11 term at University of Victoria.

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topic7web - Chapter 12 Monopoly ch12 Monopoly 1 Monopoly...

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