ECON 1P91 Lecture Notes - Lecture 8: Monopoly Price, Allocative Efficiency, Demand Curve

• School: Brock University
• Department: Economics
• Course: ECON 1P91
• Professor: All

Document Summary

Friday, november 13, 2015. Innovation and technological change can create substitutes and weaken existing monopolies. They serve to protect the firm from completion. Public franchise- exclusive right granted to firm to supply good or service. One firm can supply entire market at lower average total cost (atc) than two or more firms. Economies of scale exist over the entire length of atc: as atc increases then q decreases. As all inputs are varied, output increases q increase and atc decreases. Increased range of goods produced decreases atc [ when highly specialized (and expensive) technical inputs can be shared by different goods] Most monopolies are regulated by government. #1 behavior of unregulated monopolies to set. Power among a few producers ( because of patents or local advantages) Charges same price for each and every unit of output. Industry demand is firm"s demand. Tr= p x q. Mr= change in tr/ change in q.