AREC 384 imperfect competition: monopolies

monopolist charges a price that is _________

greater than marginal cost
what are the social costs of monopolist pricing behavior?
- reduced consumer surplus
- deadweight loss
- rent-seeking
- price regulation
illustrate reduced consumer surplus

slide 51
deadweight loss
- producer side: inefficient use of resources
- inability of willing consumers to enter the market who would have under perfect competition
rent-seeking
- rent: any money a firm gets that is more than MC
- when you actively engage in activities that produce more rent (lobbying, advertisements)
- costly activities to society? time spent on bills that benefit a few firms, etc.
price regulation

need gov't bodies to prevent abuse of market power

Author

hcunning

324976

Card Set

AREC 384 imperfect competition: monopolies

Description

lecture 5

Updated

2016-10-26T21:17:15Z

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