Monopoly

Monopoly Markets: One (pure), or possessive producer selling to an holy place market, consequently firm = industry No almost substitutes for the overlap or service ? Thus, e utmost(a)icity of demand tends to be m exclusively, near 0 ? trusty is a damage-MAKER, has full discretion everywhere Q level AND the setting of its (and and so the markets) P to maximise its lucre (objective) ? P is limited, how galvanising potential inter-industry disputation Blocked insane asylum: new firms be prevented from turn up into, or surviving in the LR, the industry, due to various fixed barriers to entry: ? Legal, exclusive contracts, patents ? actually steep fixed (initial K investment) costs Firm aims to max profits by producing up to Qm* that equates MC to MR Monopoly firms faces down sloping (rather thus horizontal) MR curve because it faces the entire (downwardly sloping) trade D curve Why is the MR< P for all moreover the rootage building block of production for a monopoly ? To sell spare units the firm non only has to go bad P on the last unit, scarcely on all previous units (unless it engages in price discrimination- charging different buyers different Ps) Since MR< P for all barely first unit of Q, the D and MR curves slope downward [pic] monopolistic competition (M.C): Hybrid of PC and monopoly markets (most common type in US) Assumptionsfeatures of M.

C markets ? comparatively easy (but non free) entry because barriers to entry are low ? large number of firms in a give product group ex: two or three dozen Therefore, little probability for secret approval among firms, since they cannot be intimate all other rivals prices, qualities, costs, etc make out Form of rival: merchandise Differentiation ? Via promotionmarketing publicizing thus close but not perfect substitutes ? A firm can...If you motivation to get a full essay, holy order it on our website: Ordercustompaper.com

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