Micro - Market Power Flashcards
1
Q
Monopoly
A
Price Maker
Unique good with no close substitutes
High barriers to entry
No competeition
2
Q
Profit Maximising Point
A
MR = MC
3
Q
Total Revenue
A
Price x Quantity
First rectangle on Market Power graph
4
Q
Total Cost
A
Up to AC curve from Q1
5
Q
Total Profit
A
Gap between AC curve and the TR price
6
Q
Why is there Deadweight Loss in a Monopoly
A
They produce too little output and charge too high of a price
