Monopoly Flashcards
Why is google considered a monopoly?
Even though its not 100% a monopoly because it still has competitors, but its still dominant and makes up over 90% of the search engine market
What are the three characteristics of a monopolistic market structure?
Only has one firm in the industry, there are no close substitutes, and there are barriers to enter the market, almost impossible
What’s market power?
The ability of a firm to set prices for its output in the market
What is economies of scale and how does it help a firm increase Hs market power?
Economies of scale says that as a firms out put increases, the total cost decreases, which makes them a better price than competitors, discouraging their entry into the market
How does the government play a part in monopoly?
The government can grant a firms permission to provide specific goods or services while prohibiting others to do so, eliminating potential competition
