Microeconomics,, 16th Canadian Edition

Figure 10-2 Short-Run Profit Maximization for a Monopolist Short-Run Profit Maximization We began this chapter by noting that th ...

The profit-maximizing output is where price is rules for profit maximization require and (AVC not shown in the graph, but it mus ...

An important aspect of monopoly is shown by the outcome in Figure 2. The profit-maximizing level of output is determined where ( ...

Figure 10-3 The Inefficiency of Monopoly profit-maximizing level of output is determined where the MC and MR curves intersect. F ...

The level of output in a monopolized industry is less than the level of output that would be produced if the industry were perfe ...

we can observe why the decisions of the monopolist—though perhaps very profitable for the firm—lead to an inefficient outcome fo ...

Why Are Monopolies Rare? Few of the firms that sell the goods and services you buy are monopolists. Some may be very large in th ...

Entry Barriers If monopoly profits are to persist, the entry of new firms must be prevented. Anything that prevents the entry of ...

A natural monopoly occurs when the industry’s demand conditions allow no more than one firm to cover its costs while producing a ...

Applying Economic Concepts 10-1 Network Effects as Entry Barriers Digital technologies and social media have introduced many pro ...

Created Entry Barriers Many entry barriers are created by conscious government action. Patent laws, for instance, prevent entry ...

sanctioned monopoly on the delivery of first-class mail. In other cases the regulation and/or licensing of firms severely restri ...

to impose unsustainable losses on a new entrant—to heavy brand-name advertising. (These and other created entry barriers will be ...

The Very Long Run and Creative Destruction In the very long run, technology changes. New ways of producing old products are inve ...

compete with the provider of local land-line telephone services without having to establish an expensive network of wires, thus ...

Disruptive Technologies and Creative Destruction Seventy-five years ago, Joseph Schumpeter coined the phrase “creative destructi ...

twentieth century. In the 1960s the airplane eliminated the ocean liner as a means of long-distance travel (but not for holiday ...

Schumpeter argued that this process of creative destruction reflects new firms’ abilities to circumvent entry barriers that woul ...

extends, however, to any market structure that allows profits to exist in the long run. Today, pure monopolies are few, but ther ...

10.2 Cartels and Monopoly Power So far in our discussion, a monopoly has meant that there is only one firm in an industry. A sec ...