Essay on Chiang 3e Lect Ppt Ch 09 Econ Micro

Chiang 3e Lect Ppt Ch 2009 Econ Micro

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CHAPTER 9:

MONOPOLY

COREECONOMICS, 3RD RELEASE BY ERIC CHIANG

Photo slides by Debbie Evercloud

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CHAPTER OUTLINE

• Monopoly Markets

• Assessing Monopoly and Competition

• Regulation and Antitrust

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LEARNING OBJECTIVES

• At the end with this chapter, students will

have the ability to:

– Identify characteristics of monopoly and

monopoly electrical power

– Describe how businesses use obstacles to entrance to

keep monopoly electric power

– Employ monopoly marketplace analysis to determine

equilibrium selling price and amount

– Illustrate the difference between monopoly

and competition

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LEARNING OBJECTIVES

• At the end on this chapter, students will

manage to:

– Identify the different forms of price

elegance

– Explain the different ways to

regulating an all natural monopoly

– Relate a history and aim of antitrust

legislation to monopoly analysis

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LEARNING OBJECTIVES

• At the end of this chapter, the student will

have the ability to:

– Bring up the history and purpose of antitrust

legislation to monopoly evaluation

– Apply concentration percentages and the HerfindahlHirschman index to investigate the likelihood of rules in a presented market

– Describe the conditions of a contestable

market as well as its significance

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YAHOO AS AN EXAMPLE OF

MONOPOLY POWER

• Yahoo is among the a firm with

monopoly power.

– This implies it has a chance to control value.

• Yahoo is not a pure monopoly because it

has its own competitors.

– Yet it is dominant in the market that it's

behavior is very different from your behavior of

firms under perfect competition.

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BY THE FIGURES: MONOPOLY

ELECTRIC POWER

• Example of a

monopoly:

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– Fb maintains

a dominant market

share in social media

in spite of attempts simply by

competitors to

wrestle this power

aside.

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MONOPOLY

• You will of monopoly:

– The industry has merely one seller.

– No close substitutes can be found for the item.

– There are significant boundaries to the access of

different firms.

• Monopoly electricity implies that a good has

some control over price.

– A strong need not become a monopoly to obtain some

level of monopoly electrical power.

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SOURCES OF MARKETPLACE POWER

• The key to advertise power has a

significant barrier to entry.

– A hurdle to admittance is any kind of obstacle that makes it

more difficult to get a firm to enter an industry.

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BOUNDARIES TO ENTRANCE

• Boundaries to admittance include:

– Control over an important factor of production

– Government franchises, patents, and

copyrights

– Economies of scale

• A firm activities economies of scale in the event that its

normal total costs decline since it expands

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MONOPOLY PRICING

• For the monopolist, limited revenue can be

less than cost.

– In contrast to the perfect competitor, the monopolist

faces a downward-sloping require curve.

– This is because the firm need to lower it is price in

order to promote one more device of the merchandise.

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MONOPOLY PRICING

• A monopolist is going to seek to develop the

profit-maximizing quantity, where marginal

income equals minor cost.

• Because price exceeds marginal revenue,

it is going to alsoThe

exceed

marginal

price.

monopolist will discover the

profit-maximizing quantity 1st;

then determine the price.

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