Chapter 22 - "Pure Monopoly"

An introduction to pure monopoly
  • Examples of monopoly
  • Dual objectives of the study of monopolyChapter 22 - "Pure Monopoly" - Welker's Wikinomics Page

Barriers to entry
  • Economies of scale
  • Legal barriers to entry: Patents and Licenses
  • Ownership or control of essential resources
  • Pricing and other strategic barriers to entry

Monopoly demand
  • Marginal revenue is less than price
  • The monopolist is a price maker
  • The monopolist sets prices in the elastic region of demand

Output and price determination
  • Cost data
  • MR=MC rule
  • No monopoly supply curve
  • Misconceptions concerning monopoly pricing
  • possibility of losses by monopolist

Economic effects on monopoly
  • Price, Output, and Efficiency
  • Income transfer
  • Cost Complications
  • Assessment and policy options

Price Discrimination
  • Conditions
  • Examples of price discrimination
  • Graphical analysis

Regulated monopoly
  • Socially optimal price: P=MC
  • Fair-return price: P=ATC
  • Dilemma of regulation



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