Monopoly Flashcards
1
Q
Introduction
A
1) no close substitute
2) no barriers entry
3) price setting
4) always elastic
2
Q
Maximum price market will beat
A
1) perfect completion
- P=MR=MC
- make econ profit entry
2) Monopoly
- Profit max highest price
- P>MR so P>MC- go up to demand
- barriers to entry
3
Q
Price discrimination
A
- profitability
1) amount groups buyers (pay price willing pay, more prod auto, more econ profit)
2) units of goods
4
Q
Profiting by price discrimination (types)
A
1) single price profit (as before)
2) 2 types (separate groups) add
3) Several types
