tailieunhanh - Lecture Essentials of economics (3/e): Chapter 8 - Brue, McConnell, Flynn
Chapter 8 - Pure monopoly. This chapter is divided into six basic sections: the characteristics of pure monopoly, the barriers to entry that create and protect monopolies, price and output determination under monopoly, the economic effects of monopoly, price discrimination under monopoly, and the regulation of monopolies. | Pure Monopoly Chapter 8 McGraw-Hill/Irwin Copyright © 2014 by The McGraw-Hill Companies, Inc. All rights reserved This chapter is divided into six basic sections: the characteristics of pure monopoly, the barriers to entry that create and protect monopolies, price and output determination under monopoly, the economic effects of monopoly, price discrimination under monopoly, and the regulation of monopolies. The discussion of barriers to entry states at the outset that these barriers may occur to some extent in any form of imperfect competition, not just in a pure monopoly. The concept of a natural monopoly is addressed in this section. Building on the analysis of the preceding chapter, the discussion of the price output decision making by monopoly firms points out that the marginal-revenue–marginal-cost rule still applies. Emphasis here is on the major difference between the determination of marginal revenue in pure competition and in pure monopoly. The misconceptions about monopoly pricing behavior are presented, as well as a comparison of efficiency in pure competition and pure monopoly. This section ends with a discussion of the effects of monopoly power in the . economy and some policy alternatives. The case of price discrimination and its effects are discussed along with the conditions necessary for it to occur. At the end of the chapter, the basic issues involved in the regulation of public service monopolies are reviewed. An Introduction to Pure Monopoly Single seller—a sole producer No close substitutes—unique product Price maker—control over price Blocked entry—strong barriers to entry block potential competition Nonprice competition—mostly PR or advertising the product 8- A pure monopoly means that there is only one producer of the good with no close substitutes being produced by any other firms. Since the firm is the industry, they have control over the price that is charged for their good. Monopolies are created and sustained due to . | Pure Monopoly Chapter 8 McGraw-Hill/Irwin Copyright © 2014 by The McGraw-Hill Companies, Inc. All rights reserved This chapter is divided into six basic sections: the characteristics of pure monopoly, the barriers to entry that create and protect monopolies, price and output determination under monopoly, the economic effects of monopoly, price discrimination under monopoly, and the regulation of monopolies. The discussion of barriers to entry states at the outset that these barriers may occur to some extent in any form of imperfect competition, not just in a pure monopoly. The concept of a natural monopoly is addressed in this section. Building on the analysis of the preceding chapter, the discussion of the price output decision making by monopoly firms points out that the marginal-revenue–marginal-cost rule still applies. Emphasis here is on the major difference between the determination of marginal revenue in pure competition and in pure monopoly. The misconceptions about .
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