Monopoly Flashcards
1
Q
MR
A
Because monopolistic firm is downward sloping D curve
2
Q
Monopoly rents
A
The profit that a monopolistic earns in LR
Monopoly doesn’t have single S curve
Monopolist bases supply decision on MR not demand directly and MR depends on shape of D curve
3
Q
Non linear pricing
A
Schedule of quantities sold at different per unit price
A regulatory agency can opt for marginal cost pricing (monopoly will operate at loss) or doe AVC pricing (where inefficient q will be produced)
4
Q
Natural monopoly
A
Firm exhibits diminishing average cost over broad range of output levels
