The second constraint on monopoly power arises out of the income and willingness of consumers

The second constraint on monopoly power arises out of the income and willingness of consumers

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The second constraint on monopoly power arises out of the income and willingness of consumers . If the monopolist attempts to charge a price as high as P n his sales fall to zero. So even though a monopolist has complete freedom to charge any high price this freedom is restricted by the consumer’s ability to purchase goods. Finally, monopoly power also depends upon elasticity of the demand curve . If the demand curve is rigid or less elastic the monopolist has a greater degree of
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Unformatted text preview: control . As the demand curve becomes more flexible or flatter the monopolist’s control starts declining. This can be explained with the help of Figure 39. In the figure there are two demand curves. DD 1 is rigid or less flexible showing greater monopoly control. DD 2 is flatter or more flexible and depicts a lower degree of monopoly control....
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This note was uploaded on 11/26/2011 for the course ECON MICRO ec 201 taught by Professor - during the Fall '10 term at Montgomery.

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