Monopoly Flashcards
1
Q
Examples of barriers to entry
A
- Economies of scale
- Brand loyalty
- High sunk costs
- Pred/limit pricing
- Sunk costs
- Own resource
- Advertising
- Small number of firms- low competition
- Degree of product differentiation
2
Q
Benefits of price discrimination
A
- More profit- improved dynamic efficiency- better customer service
- Manage demand- encourage more off peak demand
- More elastic demand consumer get more welfare
3
Q
Price discrimination evaluation
A
- Firms may not reinvest profits
- Conditions for price discrimination may not have been met
- Less consumer welfare for inelastic market.
