Chapter 10 Market Power: Monopoly and Monopsony
Chapter 10 Market Power: Monopoly and Monopsony
Topics to be Discussed a Monopoly a Monopoly Power a Sources of Monopoly Power a The Social Costs of Monopoly Power Chapter 10 Slide 2
Chapter 10 Slide 2 Topics to be Discussed ◼ Monopoly ◼ Monopoly Power ◼ Sources of Monopoly Power ◼ The Social Costs of Monopoly Power
Topics to be Discussed ■ Monopsony ■ Monopsony Power a Limiting market Power: The Antitrust Laws Chapter 10 Slide 3
Chapter 10 Slide 3 Topics to be Discussed ◼ Monopsony ◼ Monopsony Power ◼ Limiting Market Power: The Antitrust Laws
Perfect Competition a Review of Perfect Competition ●P=LMC=LRAc o Normal profits or zero economic profits in the long run o Large number of buyers and sellers ● Homogenous product ● Perfect information ● Firm is a price taker Chapter 10 Slide 4
Chapter 10 Slide 4 Perfect Competition ◼ Review of Perfect Competition ⚫ P = LMC = LRAC ⚫ Normal profits or zero economic profits in the long run ⚫ Large number of buyers and sellers ⚫ Homogenous product ⚫ Perfect information ⚫ Firm is a price taker
Perfect Competition Market Individual Firm D LMC LRAC P DE MRE P Q
Perfect Competition Q Q P Market P Individual Firm D S Q0 P0 P0 D = MR = P q0 LMC LRAC