is derived from the added revenue decreasing at a faster rate than price.
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imperfect competition
Monopolies have ________, which indicates it has a downward sloping demand curve, where marginal revenue will be less than demand.
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Monopoly firms
Tend to be price makers, as they set the price they want.
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Allocative Efficiency
producing the exact amount of output that members of the society will need.
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inelastic demand
Goods with ________ have less substitutes to consumers.
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marginal revenue
is positive, as the prices are lowered by monopolists, which increases profits and leads to an increase in total revenue.
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Elastic demand goods
provide consumers with the ability to use substitutes.
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**Monopoly**
Is a market structure where one firm dominates the entire capacity of the industry, meaning that no exact substitutes for the goods and services can be offered
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Resource Control
A firm which controls the resources that are needed for the production of a product
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Allocative Efficiency
producing the exact amount of output that members of the society will need
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**Lack of consumer surplus**
the price of goods and services depends on the highest price which consumers are capable of paying
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**Monopoly**
Is a market structure where one firm dominates the entire capacity of the industry, meaning that no exact substitutes for the goods and services can be offered
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High barriers to entry
Entering and exiting the market due to this monopoly is hard
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**Economies of Scale**
**W**hen a firm is able to gain production advantages over its opponents by producing goods and services at a lower cost than the other firms.
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**Resource Control**
A firm which controls the resources that are needed for the production of a product
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**Government power**
Where the government chooses to give a singular the power of sole production to the market
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**Copyrights or Patents**
The government grants sole production of a product to a singular firm
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In the __elastic range__ of the demand curve
A profit maximising monopoly will be produced
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In the inelastic range
Monopolists will not produce goods and services
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Price Maker
A firm in the economy which has total control of the output and production of resources (goods and services)
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**Allocative Efficiency**
producing the exact amount of output that members of the society will need
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**Productive Efficiency**
When the production of products is being done at the lowest cost possible
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Price Discrimination
Is a selling strategy which prices the same good at different prices based on what the producer believes the consumers will pay for this product.
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**Natural Monopolies**
This monopoly is formed when there are high start-up costs leading to larger economies of scale, which leaves only one firm in charge of producing goods and services to this territory.
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Flashcard (132)