ECO100Y5 Chapter Notes - Chapter 13: Marginal Cost, Natural Monopoly, Marginal Revenue

• School: UTM
• Department: Economics
• Course: ECO100Y5
• Professor: Michael H O

Document Summary

4 principle models of market structure: perfect competition, monopoly, oligopoly, and monopolistic competition. This system of market structures is based on two dimensions: the number of producers in the market (one, few, or many, whether the goods offered are identical or differentiated. A monopolist is a firm that is the only producer of a good that has no close substitutes. An industry controlled by a monopolist is known as a monopoly. Market power is the ability of a firm to raise prices. A natural monopoly exists when increasing returns to scale provide a large cost. A network externality exists when the value of a good or service to an individual is greater when many other people use the good or service as well: government-created barrier. A patent gives an inventor a temporary monopoly in the use or sale of an. A copyright gives the creator a literary or artistic work sole rights to profit from invention that work.