Unformatted text preview: B. Proﬁts for a monopolist Comparing monopoly and perfect competition: In panel (a), the television industry is perfectly competitive and price and quantity are
determined by the intersection of the demand and supply curves. In panel (b), the perfectly
competitive television industry became a monopoly. As a result, the equilibrium quantity falls,
and the equilibrium price rises. - The industry supply curve becomes the monopolists marginal cost curve.
0 The monOpolist reduces output to where marginal revenue equals marginal cost QM.
o The monopolist raises the price from Pc to PM. Fi c 14.3 a. ...
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- Spring '11