Monopolies and Market Structures

Flashcards reviewing key concepts related to monopolies, market structures, and competitive firms.

To maintain a monopoly, what must a firm have?

A firm must have a strong barrier to entry.

What is the network effect?

It refers to a situation in which a product's usefulness increases with the number of people using it.

The demand curve for a monopoly firm's product is:

The market demand for the product.

What is likely to happen to a monopoly in the long run if costs and demand stay the same and entry is blocked?

As long as there are entry barriers, this firm will continue to enjoy economic profits

Which of the following is a unique characteristic of oligopolies?

Firms may collude among themselves.