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Chapter 24: Q. 24.1LO (page 535)

Identify situations that can give rise to monopoly

Short Answer

Expert verified

As a result, there is no variation between firm's offering and market supply in an extremely pure monopoly.

Step by step solution

01

Introduction

In a rather market system, there are also many organizations, but neither of them would be especially large. During an excessively monopolistic market, on the other hand, there is just one big company. Now this organization supports the entire sector.

02

Given Information

The cartel doesn't really experience any competition since there are no close substitutes.

03

Explanation

Requirements establish an oligopolistic industry framework. For starters, the market is focused on a single company. Second, there are more than hurdles. These hurdles are so strong that another company will be unable to join the market. Third, no close alternatives exist for such nice that the monopolistic company produces.

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Most popular questions from this chapter

Understand price discrimination.

Use the following graph to answer the questions that follow,

a. What is the monopolist's profit-maximizing output?

b. At the profit-maximizing output rate, what are average total cost and total revenue ?

c. At the profit-maximizing output rate, what are the monopolist's total cost and total revenue?

d. What is the maximum profit?

e. Suppose that the marginal coot and average total cost curves in the diagram also illustrate the horizontal summation of the firms in a perfectly competitive industry in the long run. What would the equilibrium price and output be if the market were perfectly competitive? Explain the economic cost to society of allowing a monopoly to exist.

What essential economic conditions must be satisfied for firms to succeed in utilizing big data techniques to engage in price discrimination that increases their profits?

Is there any economic difference between a customer loyalty-card program offered by a legitimate drugstore and the program established by the Marseilles drug dealer?

Look again at Figure 24-5. Suppose that Q2 is equal to 35 units of output per time period. If the vertical distance to point C is \(6 per unit and the vertical distance to point B is \)3 per unit, then by how much does producing the 35 th unit of output affect the firm's economic profits?
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