Chapter 25 - Monopoly and Price Discrimination

network externality

A(n) ________ is the value of a product to the consumer increases with.

deadweight loss

The ________ from monopoly is a measure of the inefficiency from monopoly; equal to the decrease in market surplus.

natural monopoly

A(n) ________ is a market in which the economies of scale in production are so large that only a single large firm can earn a profit.

market power

A(n) ________ where the firm must have some control over its price, facing a negatively sloped demand curve for its product.

Rent

________- seeking is a process of using public policy to gain economic profit.

monopoly

A(n) ________ is a market in which a single firm sells a product that does not have any close substitutes.

patent

A(n) ________ is an exclusive right to sell a new good for some period of time.

Flexjoints competitors

________ will need 3 years to develop and produce their own versions of the drug, so if Flexjoint isnt protected by a patent, its monopoly will last only 3 years.

Price discrimination

________ is the practice of selling a good at different prices to different consumers.

Rent

________- seeking is inefficient because it uses resources that could be used in other ways.

Market power

________ is the ability of a firm to affect the price of its product.

Marginal revenue

_____________________ = new price + (slope of demand curve X old quantity)

barrier to entry

A _____________ is something that prevents firms from entering a profitable market.