N23-monopoly dwl jpw (1)

The simple monopolist may or may not be productively

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The simple monopolist may or may not be productively efficient . Compared to the competitive equilibrium, there is a transfer of surplus from consumers to producers, but not all lost consumers’ surplus is gained by the simple monopolist.
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microL23-F2010-page http://www.arts.cornell.edu/econ/wissink/econ1110jpw/ Simple Monopoly versus Perfect Competition P.C. S.M.
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microL23-F2010-page http://www.arts.cornell.edu/econ/wissink/econ1110jpw/ Going From Perfect Competition To Simple Monopoly With No Cost Curve Shifts
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microL23-F2010-page1 http://www.arts.cornell.edu/econ/wissink/econ1110jpw/ Price Discriminating Monopolists A monopolist might be able to charge different prices for different units sold and enhance its profits. charge different people different prices charge the same person different prices for different units Price Discrimination charging different prices for different units with no cost basis for the differential in price charging the same price for different units when there are cost differences
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microL23-F2010-page1 http://www.arts.cornell.edu/econ/wissink/econ1110jpw/ Requirements for Price Discrimination Some amount of monopoly power. An ability to prevent resale. Detailed information about who is buying what unit, and what that demander is willing to pay.
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microL23-F2010-page1 http://www.arts.cornell.edu/econ/wissink/econ1110jpw/ Believe It Or Not What would you do to prevent resale??? When: 1940’s Market: plastic molding powder industrial users: .85/pound denture manufacturers: $22/ pound Firm: Rohm and Haas Problem: resale from industrial users to denture manufacturers was reducing profit Solution: rumor you are mixing arsenic in the powder sold to industrial users!
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