Chapter 12 - Monopoly. The contents of this chapter include all of the following: After studying this chapter, you will able to Explain how monopoly arises and distinguish between single-price monopoly and price-discriminating monopoly, explain how a single-price monopoly determines its output and price, compare the performance and efficiency of single-price monopoly and competition,. | Monopoly Objectives After studying this chapter, you will able to Explain how monopoly arises and distinguish between single-price monopoly and price-discriminating monopoly Explain how a single-price monopoly determines its output and price Compare the performance and efficiency of single-price monopoly and competition Objectives After studying this chapter, you will able to Define rent seeking and explain why it arises Explain how price discrimination increases profit Explain how monopoly regulation influences output, price, economic profit, and efficiency The Profits of Generosity Most of us use Microsoft Windows to run our computers. Microsoft isn’t a price taker like the firms in perfect competition. How does a firm like Microsoft decide the quantity to produce and the price to charge? Students get lots of price breaks—at the movies, hairdresser, and on the airlines. Why? How can it be profit maximizing to offer lower prices to some customers? Students love . | Monopoly Objectives After studying this chapter, you will able to Explain how monopoly arises and distinguish between single-price monopoly and price-discriminating monopoly Explain how a single-price monopoly determines its output and price Compare the performance and efficiency of single-price monopoly and competition Objectives After studying this chapter, you will able to Define rent seeking and explain why it arises Explain how price discrimination increases profit Explain how monopoly regulation influences output, price, economic profit, and efficiency The Profits of Generosity Most of us use Microsoft Windows to run our computers. Microsoft isn’t a price taker like the firms in perfect competition. How does a firm like Microsoft decide the quantity to produce and the price to charge? Students get lots of price breaks—at the movies, hairdresser, and on the airlines. Why? How can it be profit maximizing to offer lower prices to some customers? Students love monopoly! Most of your students are taking an economics course because they think it will help them either get a better job or run a better business. Many of your students are aspiring entrepreneurs. You’ve just had them slog through a heavy chapter on perfect competition, the bottom line of which is: the bottom line is miserable. Normal profit may be the best that many people can achieve but it is not very exciting. This chapter teaches the students how to make a serious entrepreneurial income. Innovate, create a monopoly that produces something that people value much more than the cost of producing it, and price-discriminate as much as possible. The monopoly model as a benchmark. Explain (like you did in the case of perfect competition) that although no real-world industry satisfies the full definition of a monopoly market, the behavior of firms in many real-world industries can be predicted by using the monopoly model. Mention that this chapter examines the least competitive end of the .
