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Description
Flashcards by Matthew Battell, updated more than 1 year ago
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Created by Matthew Battell
about 3 years ago
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| Question | Answer |
| Monopolies | A monopoly is a dominant firm in one industry leading to the point of little to no competition Characteristics -High barriers to entry as it means firms cannot just join the market -Single seller: they are the only seller on the market -Price maker: Firms decide the price for consumers without risk of competitors matching it -Economies of scale: A monoploy can buy huge quantities of the raw materials at a discount |
| Types of monopolies | Pure monopolies - a firm is the only seller in the market with no other close substitutes, e.g Windows desktop Natural Monopolies -a natural monopoly develops as a sector that has high startup or fixed costs or is high specialized can produce a monopoly |
| Monopoly diagram |
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