Chapter 15 - Monopoly

Social planners

focus on the profit earned by the firm's owners, as well as the benefits received by the firm's consumers.

Arbitrage

is a process where good is bought in one market at a low price but sold to another market at an even higher price to profit off the price difference.

senior citizens

Children and are charged lower prices in movie theaters.

deadweight losses

The caused due to a monopoly are similar to the that are caused due to taxes.

Discount coupons

are offered in newspapers, magazines, or online to the public.

Airplane seats

are sold at different prices to separate business travelers from leisure ones.

competitive enterprise economy

A(n) will produce the largest possible income from a given stock of resources.

Monopoly

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

Sherman Antitrust Act

The was passed by Congress in 1890, reducing the market power of dominating trusts at that time.

Vertical mergers

are mergers between firms at different stages of the production process.

Horizontal mergers

are mergers between two firms in the same market.

Clayton Antitrust Act

The was passed in 1914, causing the government's powers to grow and authorizing private lawsuits.

Price discrimination

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

distribution of water

The is an example of a natural monopoly.

output effect

The shows that if more output is sold, Q will be higher, causing the total revenue to increase.

price effect

The shows the prices falling, meaning P is lower, so the total revenue decreases.

Monopoly

_: a firm that is the sole seller of a product without any close substitutes.