Monopoly in Economics

Flashcards covering key concepts, definitions, and terminology related to monopolies in economics.

Monopoly

A firm that is the sole seller of a product without close substitutes.

Barriers to Entry

Obstacles that prevent new competitors from easily entering an industry or area of business.

Natural Monopoly

A type of monopoly that arises because a single firm can supply a good or service to an entire market at a lower cost than could multiple firms.

Price Discrimination

The business practice of selling the same good at different prices to different customers.

Marginal Revenue (MR)

The additional revenue generated from selling one more unit of a good or service.

Deadweight Loss

The loss of economic efficiency that occurs when the equilibrium outcome is not achievable or not achieved.

Economies of Scale

Cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale as fixed costs are spread out over more units.

Price Maker

A firm with the ability to set its own prices rather than accepting the prevailing market price.

Monopoly Resources

A situation where a single firm owns a key resource required for production.

Monopolist's Profit Maximization

A monopolist maximizes profit by producing where marginal revenue equals marginal cost.