11-1Mono - Monopoly Chapter 15-1 The market structure of...

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Monopoly Chapter 15-1 The market structure of Monopoly
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What is a Monopoly? A monopoly is a market structure in which there is a single supplier of a product. The monopoly firm (monopolist) : May be small or large. Must be the ONLY supplier of the product. Sells a product for which there are NO close substitutes. Monopolies are fairly common: U.S. Postal Service, local utility companies, local cable providers, etc.
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Introduction Monopoly is a market structure in which a single firm makes up the entire market. Monopolies exist because of barriers to entry into a market that prevent competition.
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The Creation of Monopolies Monopolies often arise as a result of barriers to entry. Barrier to entry : anything that impedes the ability of firms to begin a new business in an industry in which existing firms are earning positive economic profits. There are three general classes of barriers to entry: Natural barriers, the most common being economies of scale Actions by firms to keep other firms out Government (legal) barriers
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11-1Mono - Monopoly Chapter 15-1 The market structure of...

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