Econ 3-23-2011 - 14:21...

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14:21 Repeat Questions, 24, 9, 25, 27 from Exam Form 1 Monopoly vs. Perfect Competition Demand curve to firm in PC: horizontal o Firms are price takers, unable to affect price - they can sell as much as  they want at a given price Demand curve to monopolist:  the whole demand curve A monopoly reduces the quantity from the competitive level.  Markets are  inefficient Firm will make economic profits by reducing quantity and increasing price Preventing Monopoly If not a natural monopoly then prevent or break up (decreasing LRATC) Antitrust Policy:  deals with monopolies…next chapter But if natural monopoly o We would expect it to reemerge o One producer is the lowest cost method of production—breaking up would  be inefficient. Dealing with natural monopolies Public ownership Regulation Do Nothing  Natural Monopolies Public Ownership o
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This note was uploaded on 10/04/2011 for the course ECON 201 taught by Professor C.liedholm during the Spring '07 term at Michigan State University.

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Econ 3-23-2011 - 14:21...

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