monopoly

monopoly - Monopoly Quantity & Price Elasticity...

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Unformatted text preview: Monopoly Quantity & Price Elasticity Welfare Monopoly Chapter 24 monoply.gif (GIF Image, 289x289 pixels) http://i4.photobu Monopoly Quantity & Price Elasticity Welfare About Midterm 1 Clicker vote: The MC questions were A) Too easy/short B) Just right C) Too difficult/long Monopoly Quantity & Price Elasticity Welfare About Midterm 1 Clicker vote: Regarding the interruptions, announcements, & incentives encouraging you to write/bubble you name, perm, version, TA: A) Please do more, I might forget to write my name, version, etc. otherwise B) Just right C) Were adults and should take responsibility if we forget to write our name, etc. Please cut down on the interruptions. They make it hard to concentrate. Monopoly Quantity & Price Elasticity Welfare About Midterm 1 MC score report available now from TA in OH or section Blue-books available by Monday Score look-up tool on class website Enter ID number from section View recorded score for any exam or quiz See syllabus for approximate letter grade distribution. I will post histogram of total scores w/ rough cutoffs for letter grades. Results known so far: good performance on MC part (out of 8 questions: 1/3 got 8, 2/3 got at least 7, 4/5 got at least 6) Warning: topics get more complex as we go along! Monopoly Quantity & Price Elasticity Welfare Motivating Questions What price and quantity does a monopoly choose? What are the welfare effects of monopoly? What are the effects of taxes on monopolies? Is monopoly every justified/efficient? Monopoly Quantity & Price Elasticity Welfare What is a monopoly? A monopoly is a sole supplier of a good. The monopolists demand curve is the market demand curve. Price maker not a price taker Can set price (quantity is constrained by demand curve relationship) Or: chooses quantity, which determines price Monopoly Quantity & Price Elasticity Welfare What causes monopolies? Legal fiat: US Postal Service Patent: drugs, technology; intellectual property Sole ownership of a resource: toll road Cartel: OPEC Large economies of scale: local utilities Monopoly Quantity & Price Elasticity Welfare Government & Monopoly Monopoly is heavily regulated Antitrust Law: abuse of monopoly power is a felony Dept. of Justice (DOJ) has antitrust division Federal Trade Commission (FTC) has regulatory oversight Monopoly Quantity & Price Elasticity Welfare Government & Monopoly Monopoly is heavily regulated Antitrust Law: abuse of monopoly power is a felony Dept. of Justice (DOJ) has antitrust division Federal Trade Commission (FTC) has regulatory oversight But govt. creates monopolies (USPS) and issues patents/copyrights that grant monopoly power. Monopoly Quantity & Price Elasticity Welfare Government & Monopoly Monopoly is heavily regulated Antitrust Law: abuse of monopoly power is a felony Dept. of Justice (DOJ) has antitrust division Federal Trade Commission (FTC) has regulatory oversight...
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monopoly - Monopoly Quantity & Price Elasticity...

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