Studied by 4 people
Pure monopoly
Single firm is sole producer of product w/ no close substitutes
Barriers to entry
Factors that prohibit firms from entering industry
Simultaneous consumption
Product’s ability to satisfy large # of consumers at same time
Network effects
Value of product to each user increases as total number of users increases
X-inefficiency
Firm produces output at higher cost than necessary to produce
Rent-seeking behavior
Activity designed to transfer income/wealth to a firm/resource supplier at someone else’s expense
Price discrimination
Selling a specific product at more than one price when the price differences are not justified by cost differences
entry
Blocked ________- No potential competitors can enter industry.
Socially optimal price
Allocative efficiency; P = MC
Fair-return price
Permits fair return to firm owners; P = ATC
