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Monopolies

Monopolies. Definition, Causes & Pricing Chapter 15. 4 Market Structures. Lowest Price Highest Quantity No DWL. Highest Price Lowest Quantity DWL. Perfect Competition. Monopolistic Competition. Monopoly. Oligopoly. Most competitive. Least competitive.

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Monopolies

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  1. Monopolies Definition, Causes & Pricing Chapter 15

  2. 4 Market Structures Lowest Price Highest Quantity No DWL Highest Price Lowest Quantity DWL Perfect Competition Monopolistic Competition Monopoly Oligopoly Most competitive Least competitive

  3. Monopoly Market Characteristics • One Seller • Unique Product—no substitutes • Difficult/Impossible to enter or leave industry • Limited Information • Great deal of price control— Price Setters

  4. Barriers to Entry • The fundamental cause of monopoly isBarriers to Entry • 3 primary sources of Barriers to Entry: 1) Ownership of a key resource 2) Government gives one firm the exclusive right to produce 3) Costs of production make a single producer more efficient

  5. Qty Produce ATC Examples Utilities: Electricity, Gas & Water Natural Monopolies • natural monopoly-when a single firm can supply a good or service at a lower cost • Develop in industries with largeeconomies of scale

  6. Perfect Together? Government Regulation • Antitrust laws(1890) -a collection of statutes aimed at curbing monopoly power by: • Breaking up companies • Preventing mergers • Regulating pricing

  7. Current Events. Proposed Merger wanted to buy BenefitsCosts

  8. Anti-trust law video Monopoly Power in 2012? Apple

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