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Importance of elasticity of demand and supply?
exploitation of monopoly power in market-the extent to which a firm or firm with monopoly power can raise price in market to extract consumer surplus and it into extraprofit
When does a firm have market power?
A firm is a monopoly if it is the sole seller of its product and if its product has no close substitutes.
When a firm has little ability to influence market prices it is said to be in what kind of a market?
Imperfect monopoly
Under what market structure does the firm have the most control over prices?
Monopoly
Why is a Monopoly markets undesirable RELATIVE to perfect competitive market discuss?
In Monopoly, there is no market power as the monopoly firm is the only supplier and holds pricing power. However in a perfect competitive market, prices are set by interaction of supply and demand. This is why monopoly markets are undesirable relative to perfect competitive market.
Importance of elasticity of demand and supply?
exploitation of monopoly power in market-the extent to which a firm or firm with monopoly power can raise price in market to extract consumer surplus and it into extraprofit
When does a firm have market power?
A firm is a monopoly if it is the sole seller of its product and if its product has no close substitutes.
When a firm has little ability to influence market prices it is said to be in what kind of a market?
Imperfect monopoly
Under what market structure does the firm have the most control over prices?
Monopoly
Why is a Monopoly markets undesirable RELATIVE to perfect competitive market discuss?
In Monopoly, there is no market power as the monopoly firm is the only supplier and holds pricing power. However in a perfect competitive market, prices are set by interaction of supply and demand. This is why monopoly markets are undesirable relative to perfect competitive market.
What do you call a business that controls a market and no competition?
A monopolistic firm is a firm that controls the market. This is only possible with scarce competition (little to none.) The market structure is called a monopoly when this happens.
What best describes the market structure of a monopoly?
A monopoly is when a market has many buyers but only one seller.
What does the monopoly surplus graph reveal about the market power and economic efficiency of a monopolistic firm?
The monopoly surplus graph shows that a monopolistic firm has market power, meaning it can set prices higher than in a competitive market. This leads to economic inefficiency because the firm produces less and charges higher prices, resulting in a deadweight loss for society.
Example of dominant-business firm?
A dominant business firm is close to a monopoly. It has no close competitors, and dominates more than half of the market that it is in.
Are eBay and Amazon examples of monopolistic competition?
A monopoly is when one firm has a controlling share in the market. As such he can set the price. eBay is a monopoly Amazon WAS a monopoly but is now simply an online retailer
What are the incentives to innovate for a monopoly firm as compared with a firm in a competitive market if patent protection is not available?
A monopoly firm has greater incentives to innovate compared to a firm in a competitive market because it can capture the full economic returns from its innovations, resulting in higher profits. With no competition, the monopoly can recoup its investment in research and development without the fear of losing market share. In contrast, firms in a competitive market may have limited incentives to innovate, as any gains from innovation can be quickly eroded by competitors who can replicate the innovation and drive prices down. As a result, the monopoly's ability to maintain its market power makes innovation more appealing in the absence of patent protection.
How is a monopoly and a perfectly competitive firm similar?
A perfect competitive market and pure monopoly market both have to follow the "law of demand".
