PPT-Chapter 12 Monopoly 12 Monopoly

121 Introducing a New Market Structure 122 Sources of Market Power 123 The Monopolists Problem 124 Choosing the Optimal Quantity and Price 125 The Broken Invisible Hand The Cost . Chapter 12 - Monopoly Goals: 2. The monopolist’s problem 3. Seeking more surplus Part 1: Price Discrimination Part 2: Bundling Goods. Sources of Monopoly Power.  Exclusive control ove 1 Monopoly GB Instructions 5/10/00 10:24 am Page 1  • How Monopolies Form and Survive: Barriers to Entry. • How a Profit-Maximizing Monopoly Chooses Output and Price. • What are the Welfare Effects of a Monopoly. A . pure. monopoly is where . one. What does monopoly mean?. . “. monos. ” = one “. polein. ” = seller. Not a new phenomenon .  Thales, Aristotle. Necessary conditions. Single seller . Examples: most public utility companies and patented drugs.. Monopoly. Opposite of PC. Occurs when output of entire industry is produced and sold by a single firm referred to as . Monopolist. Characteristics of . Pure Monopoly. Single supplier . – . the firm and the industry are the same.. 5.3.3. Learning Outcomes. To understand the meaning of the term ‘monopoly’.. To appreciate what is meant by monopoly power and how this can influence a firm’s behaviour.. To understand the main disadvantages and advantages of a firm having monopoly power. . Copyright © 2017 Pearson Education, Inc. All Rights Reserved. Is Any Firm Ever Really a Monopoly?. We define monopoly.. Monopoly. is a market structure consisting of a firm that is the only seller of a good or service that does not have a close substitute.. Introduction. In economics, a monopoly is defined as a persistent market situation where there is only one provider of a product or service. Monopolies are characterized by a lack of economic competition for the good or service that they provide and a lack of viable substitute goods.. What is a monopoly?. A monopoly forms when barriers prevent firms from entering a market that . has a single . supplier with close to no substitute goods. .. Monopoly markets only have one seller, whereas, perfectly competitive markets have multiple sellers.. One firm selling good or service with no substitutes. Barriers to entry that prevent competition from new firms. What is a monopoly?. Monopoly in the news. Natural. One firm can meet demand at a lower ATC than two or more firms. The word Monopoly is a combination of two words in which “mono” implies “single” and “poly” means “seller”. Therefore, the market controlled by a sole trader is said to a Monopoly market.. Students will be able to identify and/or define the following terms:. Monopoly. Natural Monopoly. Patent. Do . Now. What is a barrier to entry?. Any condition that makes it difficult to enter a market.. Graph Time . Regular Monopoly . Natural Monopoly. Welfare Effects of Monopoly. Under a perfect competition the market price is the sales price leading to an efficient outcome, both productively and allocatively . What are the four . barriers to entry. .. Why . monopolists. are constrained by demand.. How . monopolists. set price and quantity.. What . social welfare. losses are associated with monopolies.. What the common public policy responses to monopolies are..