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Monopolies Redux

Monopolies Redux. Neal Barnett UHS AP Microeconomics. A Monopoly Does Not Have an S Curve. A competitive firm takes P as given has a supply curve that shows how its Q depends on P . A monopoly firm is a “price-maker,” not a “price-taker”

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Monopolies Redux

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  1. Monopolies Redux Neal Barnett UHS AP Microeconomics

  2. A Monopoly Does Not Have an S Curve A competitive firm • takes P as given • has a supply curve that shows how its Q depends on P. A monopoly firm • is a “price-maker,” not a “price-taker” • Q does not depend on P; Q and P are jointly determined by MC, MR, and the demand curve. Hence, no supply curve for monopoly.

  3. X-inefficiencies/Rent Seeking Activities

  4. Legal Cartel Theory • Cartel – A group of suppliers that maintain prices at a high level and restrict competition

  5. I have been driving for 17 years and can make 3 to $400 plus daily. I also have the option of leasing for 125 per shift, that’s $425 – 525 daily. At 6 days per week that’s $2,550-$3,150 weekly or $132600-163800 annually. Some owner drivers book $525 daily themselves. This Tuesday I made $415 and last night $385 (started late 5pm).by myself. My gas is only $10 per shift as I have a Prius. Repairs are very low. I wont comment on your self serving remarks about mental and physical health. I am 60 years old and paid $155000 for my tin. I can get over 600 thou now.

  6. Price Discrimination • Criteria • Firm must be able to set the price – have market power • Firm must be able to segment the market • Diff. elasticies of demand • Prevent resale of the item from one market segment to another

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