Monopoly Flashcards
1
Q
Pure monopoly
A
Only one firm in the market
2
Q
Competition and Market Authority Definition
A
Working monopoly 25% market share
3
Q
Monopolist profit maxmises
A
Produce output where MR = MC
This is Qm. The price is Pm
4
Q
In competitive market
A
Market produce where supply = demand. Qc and Pc. Restrict output and raise price.
5
Q
Firm makes economic profit
A
Total revenue 0PmAQm - total cost 0C1BQm
6
Q
Productively inefficient
A
Firm is not producing at the lowest point on AC curve
7
Q
Allocative inefficient
A
At Qm the price Pm is above the marginal cost of MC1
