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Assumptions of a monopoly
X inefficient
What barriers to entry can a monopolist use to keep competition away?
Patent laws
Statutory monopolies
Location
High set up costs
Why is the monopolist a price maker?
How can monopolies develop?
What other objectives can a monopolist pursuit?
Natural monopolies
A firm that can gain continuous economies of scale
Characteristics of a Natural monopoly
How can monopolies develop?
(ORGANICALLY)
How can a monopoly reduce consumer surplus and increase producer surplus?
Why is a monopoly inefficient?
Why is a monopoly efficient?
Dead weight loss
Benefits of a monopoly
Internationally competitive
(Advantage of Monopoly)
Natural Monopoly
(Advantages of Monopoly)
Research and Development
(Advantages of Monopoly)
Drawbacks of a monopoly
Reduction in consumer surplus
(Disadvantages of monopoly)
Less choice of goods and lower quality
(Disadvantages of monopoly)
X Inefficient
(Disadvantages of Monopoly)
Price discrimination
What conditions are necessary for price discrimination?
What are the methods of price discrimination?
Geographical
(Methods of discrimination)
Time
(Methods of discrimination)
Age of customer
(Method of price discrimination)
Dynamic price discrimination
First degree price discrimination
Second degree price discrimination
Third degree price discrimination
What are the consequences from price discriminating?
Advantages for the price discriminator
What are the consequences from price discriminating?
Effect on consumer
Why is the MR curve steeper than the AR curve?
