Chapter 9 Flashcards Preview

ECON265-Microeconomics > Chapter 9 > Flashcards

Flashcards in Chapter 9 Deck (16)
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1
Q

Monopoly

A
Single Seller
Unique Product (no close substitutes)
Impossible Entry
2
Q

Entry Barrier

A

Ownership of a vital resource
Legal Barrier
Economies of Scale
Economies of Scale

3
Q

Price Maker

A

Determines the price

4
Q

? sloping demand curve

A

linear downward

5
Q

Marginal Revenue =

A

a-2bQ

6
Q

Output Level Steps

A

MR = MC determines Q

Use demand curve to determine price level

7
Q

Inelastic Slope

A

high monopoly power

8
Q

elastic Slope

A

low monopoly power

9
Q

Vertical demand

A

monopoly power:infinity

10
Q

Horizontal demand

A

perfect competition

11
Q

Consumer surplus

A

area above price level and below demand curve

12
Q

Producer surplus

A

area below price level and above supply curve

13
Q

Total surplus

A

Consumer surplus + Producer surplus

14
Q

Underproduction

A

Consumer surplus increases, Producer surplus decreases, Deadweight loss incurs

15
Q

Increasing MC for Underproduction

A

price should be intersect of MC and D

16
Q

Elimination deadweightloss

A

price has to be competitive loss