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a monopoly is when
a single firm controls the entire industry and there are no close substitutes
the demand and MR curve for a monopoly are
downward sloping
the MR curve for a monopoly is
below the demand curve
the MR curve is below the demand curve because
the monopoly is a price maker and if it produces more, the price of the product decreases
government can create monopoly by
making one firm the only producer or through copyright and patents
resources can create monopolies when
one firm that produces also controls all resources
all monopolies experience
economies of scale
monopolies always produce within
the elastic range of their demand curve
monopolies experience highest revenue when
producing at unit elastic range of demand curve
in monopoly markets, there is always (think allocative and productive efficiency)
deadweight loss
a monopoly is neither
allocatively nor productively efficient
a monopoly is not allocatively efficient because
it always produces less than what society needs
a monopoly is not productively efficient because
demand (price) is always above the ATC curve
deadweight loss is graphed as where?
between the D, MR curve and on the right of profit-maxxing quantity
price discrimination is when
a firm charges the most a customer is willing to pay
What is a condition for effective price discrimination?
Separate markets based on price elasticity of demand
What is a requirement for price discrimination regarding resale?
No resale opportunities
What should price differences not be based on in price discrimination?
Cost differences
What type of firm is necessary for price discrimination to occur?
A price maker
in terms of demand curve is equal to what, in price discrimination...
demand curve is always also the marginal revenue curve
what happens to consumer surplus when price discrimination?
no surplus, all is taken by production firm
natural monopoly is when
one firm supply at lower LRATC than if there were multiple firms
natural monopoly examples
gas company, water company, electricity company, etc
socially optimal pricing is when monopoly is forced to produce at
quantity where MC curve meets Demand curve
fair-pricing is when the monopoly
experiences normal profits, produces quantity where ATC curve meets Demand curve
what is the price of monopoly market?
where vertical line of profit-maxxing quantity meets demand curve
what is operating cost of monopoly market graphically represented as?
below meeting point of ATC curve and price-maxxing quantity line, and left of price-maxxing quantity
when ATC = Demand
productively efficient
when MC = demand
allocatively efficient (socially efficient)
Note 
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