ECO FINAL REVIEW

ECO FINAL REVIEW - Monopolies CHARACTERISTICS Only 1 firm...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Monopolies : CHARACTERISTICS: Only 1 firm Undifferentiated product Has all information on market conditions Barriers to entry IMPLICATIONS: Price maker – choose a price within same range Profits greater than zero are possible in the long run BARRIERS TO ENTRY: Legal – patents, copyrights, trademarks, etc. Sole provider of a key input. (ex. Input = diamonds, provider = mines) Economies of sale o Increase size of firm ; Increase quantity Decrease the cost Supply the entire market o Increase price; lose  some  customers IN THE LONG RUN: Graph is same as in SR – until the barriers go away Barriers prevent entry o No entry
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Demand stays put EX. – CASE OF THE NATURAL MONOPOLY: No barriers to entry Occurs when demand for a good is lower than the minimum (LR-ATC) o Min. LR-ATC extends beyond the range of demand. Exs.:
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This test prep was uploaded on 04/07/2008 for the course ECO 113 taught by Professor Briggs during the Fall '07 term at Bryant.

Page1 / 6

ECO FINAL REVIEW - Monopolies CHARACTERISTICS Only 1 firm...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online