Monopoly

These flashcards cover key vocabulary and concepts related to monopolies, including definitions of terms and principles governing monopolistic behavior.

Monopoly

A firm that produces the entire market supply of a particular good or service.

Market Power

The ability to alter the market price of a good or service.

Price Discrimination

The sale of an individual good at different prices to different consumers.

Marginal Revenue (MR)

The change in total revenue that results from a one-unit increase in quantity sold.

Profit Maximization Rule

Produce at the rate of output where marginal revenue equals marginal cost (MR = MC).

Barriers to Entry

Obstacles that prevent potential competitors from entering a market.

Natural Monopoly

An industry in which one firm can achieve economies of scale over the entire range of market supply.

Economies of Scale

Reductions in minimum average costs that come about through increases in the size of plant and equipment.

Contestable Market

An imperfectly competitive industry subject to potential entry if prices or profits increase.

Antitrust Laws

Government interventions designed to alter market structure or prevent abuse of market power.