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Understanding Monopoly Economics

This document discusses monopoly, which is when a single firm controls the market for a good or service. It covers government-created monopolies through patents and copyrights, natural monopolies where one firm can produce at a lower cost, and characteristics of monopolies like being a price maker and having a downward sloping demand curve.

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19 views2 pages

Understanding Monopoly Economics

This document discusses monopoly, which is when a single firm controls the market for a good or service. It covers government-created monopolies through patents and copyrights, natural monopolies where one firm can produce at a lower cost, and characteristics of monopolies like being a price maker and having a downward sloping demand curve.

Uploaded by

camlansuc09993
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

CHAP 15.

MONOPOLY
The curve is whole the market, curve downward
Government regulation
- Government gives a single firm the exclusive right to produce some good or service
- Government-created monopolies
 Patent and copyright laws
 Higher prices*
 Higher profits
Natural monopoly (Độc quyền tự nhiên)
- A single firm can supply a good or service to an entire market
 At a smaller cost than could two or more firms
- Economies of scale over the relevant range of output
- Club goods
 Excludable but not rival in consumption
Variable Cost < Fixed Cost
Monopoly Competitive firm
Price maker Price taker
Sole producer One producer of many
Downward sloping demand: the market Demand is a horizontal line (Price)
demand curve
Total Revenue = Price x Quantity
Marginal Revenue = Delta Total Revenue / Delta Quantity
Average Revenue = Total Revenue / Quantity = Price

Price (mono) phải nằm trên Price curve.


In Monopoly, Price > Marginal Revenue. -> Mark-up
Profit tối đa tại giao điểm của MR và MC -> Quantity, kẻ đường vuông góc lên rồi chiếu lên
trên Price thì Profit tối đa.
P > MR = MC
Monopoly: Price (Mono) > Price (Competitive) , Quantity (Mono) < Price (Competitive), Higher
profit.
ĐƯỜNG CONSUMER SURPLUS NẰM DƯỚI ĐƯỜNG CUNG ( PRODUCE) VÀ TRÊN PRICE
_ Monopoly reduce efficiency , Create Dead Weight Loss.
Monopoly bring more Producer Surplus, Reduce Consumer Surplus, Reduce Total Surplus.
*Price discrimination: ( cùng 1 loại hàng hóa nhưng giá khác nhau)
_ can be viewed by Monopoly, Oligopoly, Monopolisitc Competition
*Perfect Price discrimination:

_ Tùy vào các nhóm khách hàng sẽ charge giá khác nhau.
Càng elastic giảm giá.
Profit = (P – ATC)/Q

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