AREC 384 imperfect competition: monopolies

  1. monopolist charges a price that is _________
    greater than marginal cost
  2. what are the social costs of monopolist pricing behavior?
    • reduced consumer surplus
    • deadweight loss
    • rent-seeking
    • price regulation
  3. illustrate reduced consumer surplus
    slide 51
  4. deadweight loss
    • producer side: inefficient use of resources¬†
    • inability of willing consumers to enter the market who would have under perfect competition
  5. 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.
  6. price regulation
    need gov't bodies to prevent abuse of market power
Author
hcunning
ID
324976
Card Set
AREC 384 imperfect competition: monopolies
Description
lecture 5
Updated