1907 08-11 Monopoly Monopoly pricing compared to perfect competition pricing: Monopoly P>MC Perfect Competition P=MC Economics ECONOMICS MANAGEMENT SCHOOL,TONGJI UNIVERSITY
Economics ECONOMICS & MANAGEMENT SCHOOL, TONGJI UNIVERSITY 08-11 Monopoly • Monopoly pricing compared to perfect competition pricing: – Monopoly P > MC – Perfect Competition P = MC
08-12 0 Monopoly ·Shifts in Demand In perfect competition,the market supply curve is determined by marginal cost. For a monopoly,output is determined by marginal cost and the shape of the demand curve. Economics ECONOMICS MANAGEMENT SCHOOL,TONGJI UNIVERSITY
Economics ECONOMICS & MANAGEMENT SCHOOL, TONGJI UNIVERSITY 08-12 Monopoly • Shifts in Demand – In perfect competition, the market supply curve is determined by marginal cost. – For a monopoly, output is determined by marginal cost and the shape of the demand curve
1907 08-13 Shift in Demand Leads to Change in Price but Same Output $/Q MC P1 P2 D2 MR2 MR1 Q1=Q2 Quantity Economics ECONOMICS MANAGEMENT SCHOOL,TONGJI UNIVERSITY
Economics ECONOMICS & MANAGEMENT SCHOOL, TONGJI UNIVERSITY 08-13 D2 MR2 D1 MR1 Shift in Demand Leads to Change in Price but Same Output Quantity MC $/Q P2 P1 Q1= Q2
190 08-14 Shift in Demand Leads to Change in Output but Same Price $/Q MC P1=P2 02 MR2 MR Q Q2 Quantity Economics ECONOMICS MANAGEMENT SCHOOL,TONGJI UNIVERSITY
Economics ECONOMICS & MANAGEMENT SCHOOL, TONGJI UNIVERSITY 08-14 D1 MR1 Shift in Demand Leads to Change in Output but Same Price MC $/Q MR2 D2 P1 = P2 Q1 Q2 Quantity
1907 08-15 Monopoly ·The Multiplant Firm For many firms,production takes place in two or more different plants whose operating cost can differ. Economics ECONOMICS MANAGEMENT SCHOOL,TONGJI UNIVERSITY
Economics ECONOMICS & MANAGEMENT SCHOOL, TONGJI UNIVERSITY 08-15 Monopoly • The Multiplant Firm – For many firms, production takes place in two or more different plants whose operating cost can differ