Monopoly Flashcards
1
Q
What is a monopoly
A
one firm operates in the market
2
Q
What does the inverse market demand determine?
A
it determines the price at which monopolist is able to sell
3
Q
At what elasticity will the monopolist produce?
A
the monopolist will always produce y* such that |Ed| ≥ 1 (elastic demand)
4
Q
When will the monopolist sell?
A
Monopolist will always sell at a price ≥ competitive price and p =competitive price when MC = 0… MC = P
