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1、Monopoly©2015CengageLearning.AllRightsReserved.Maynotbecopied,scanned,orduplicated,inwholeorinpart,exceptforuseaspermittedinalicensedistributedwithacertainproductorserviceorotherwiseonapassword-protectedwebsiteforclassroomuse.1WhyMonopoliesAriseMarketpowerAlterstherelationshi
2、pbetweenafirm’scostsandthesellingpriceMonopolyChargesapricethatexceedsmarginalcostAhighpricereducesthequantitypurchasedOutcome:oftennotthebestforsociety©2015CengageLearning.AllRightsReserved.Maynotbecopied,scanned,orduplicated,inwholeorinpart,exceptforuseaspermittedinalicense
3、distributedwithacertainproductorserviceorotherwiseonapassword-protectedwebsiteforclassroomuse.2WhyMonopoliesAriseGovernmentsCansometimesimprovemarketoutcomeMonopolyFirmthatisthesolesellerofaproductwithoutclosesubstitutesPricemakerCause:barrierstoentry©2015CengageLearning.AllR
4、ightsReserved.Maynotbecopied,scanned,orduplicated,inwholeorinpart,exceptforuseaspermittedinalicensedistributedwithacertainproductorserviceorotherwiseonapassword-protectedwebsiteforclassroomuse.3WhyMonopoliesAriseBarrierstoentryAmonopolyremainstheonlysellerinthemarketBecauseot
5、herfirmscannotenterthemarketandcompetewithitMonopolyresourcesGovernmentregulationTheproductionprocess©2015CengageLearning.AllRightsReserved.Maynotbecopied,scanned,orduplicated,inwholeorinpart,exceptforuseaspermittedinalicensedistributedwithacertainproductorserviceorotherwiseo
6、napassword-protectedwebsiteforclassroomuse.4WhyMonopoliesAriseMonopolyresourcesAkeyresourcerequiredforproductionisownedbyasinglefirmHigherprice©2015CengageLearning.AllRightsReserved.Maynotbecopied,scanned,orduplicated,inwholeorinpart,exceptforuseaspermittedinalicensedistribut
7、edwithacertainproductorserviceorotherwiseonapassword-protectedwebsiteforclassroomuse.5“Ratherthanamonopoly,weliketoconsiderourselves‘theonlygameintown.’”WhyMonopoliesAriseGovernmentregulationGovernmentgivesasinglefirmtheexclusiverighttoproducesomegoodorserviceGovernment-creat
8、edmonopoliesPatentandcopyrightlawsHigherpricesHigherprofits©2015Ceng
