# Questions tagged [monopoly]

A market structure in which there is a single firm acting as supplier.

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### Monopoly and general cost function

A monopolist is operating at some output level $Q1$. The government imposes a quantity tax of $6$ per unit of output. If the demand curve facing the monopolist is $P = a − bQ$, by how much does the ...
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### Does marginal revenue actually refer to marginal revenue per time unit?

When I was learning about why marginal revenue is lower than demand, I referred to this derivation: $$\frac{d(TR)}{dQ} = \frac{d(PQ)}{dQ} = \frac{PdQ + QdP}{dQ} = P + Q\frac{dP}{dQ}$$ Wikipedia ...
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### Does Russia export anything that isn't widely available elsewhere?

Some countries produce items for which there is no easy substitute. For example Taiwan produces 53% of the world's semiconductors. Is there any product(s)/service(s) for which Russia is a monopolist (...
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### Is a Monopoly equilibrium also a Nash equilibrium?

Consider a monopoly with price power in the market and the demand is a function of price. Can the result of such a monopoly problem be called a nash equilibrium?
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### Book reference for graphs explaining ad valorem and specific taxes

Does anyone know any book in which I can read and see graphs about the ad valorem or specific tax in monopolies or perfect competition? I need a graph like this with the explanation but i can't find ...
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### How can I compare surplus in monopolistic competition to surplus in monopoly?

Is there any way to compare the total surplus and consumer/producer surplus in monopolistic competition with that of perfect competition or monopoly? All I can come up with is the idea that deadweight ...
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### Will there always be excess profit in the Cournot model equilibrium/monopoly

So I'm studying market structures for the end of term, and I'm a bit confused about excess profits. From what I can see, excess profits occur when the demand curve intersects the AC curve - the MR=MC ...
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### Comparative statics of a monopoly

Consider a profit maximising monopolist with linear demand Q(P*) and total production cost C(Q(P*)) who faces a per unit tax t. Suppose the slope of marginal cost is decreasing in some parameter, μ. ...
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### Demand Function in monopoly [duplicate]

I am studying monopoly and I see that most exercises use inverse demand. why use the inverse demand function instead of the demand function?
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### Why there is no supply on monopoly markets?

We learned in the class that monopoly markets do not have supply curve. Our textbook (Microeconomics and Behavior, page 388 from, R. Frank) says: A monopolist has no supply curve and it explains it ...
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### Efficiency in a market that is both a monopoly and a monopsony

We know that market power in general leads inefficient outcomes (in terms of Pareto efficiency). This makes instinctive appeal as, for example, a powerful seller who has a lot of market power can ...
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### Pareto Improvement with Monopolies

This may be one of the more 'elementary' questions on this site.. But I really can't wrap my head around it and a search on the web hasn't yielded much. Given that Pareto efficiency is defined as when ...
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### How does a CLEC innovate?

A CLEC, competitive local exchange carrier, is described... A competitive local exchange carrier (CLEC), in the United States and Canada, is a telecommunications provider company (sometimes called a &...
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### The Dumping Argument and Trusts

I have often heard the following argument against the antimonopoly/anticollusion law: Whenever the entrepreneurs decide to enter into "illegal" collaboration, each one has an opportunity to ...
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### Does the theory of contestable markets apply to industries where there is a natural monopoly?

The theory contestable markets requires that there be no barriers to entry, no sunk costs, and access to the same level of technology. I know common industries that have natural monopolies (like ...
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### Lerner Index Interpretation?

How do you interpret the Lerner Index? I ask because at Uni. we have been told that, for monopoly, when the producer max. his profit, he sets the price such as the demand is elastic and the lerner ...
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### Multiplant Monopoly With Third Degree Price Discrimination

I am trying to do an exercise with a Monopoly Firm with 2 production plants that supplies 3 different markets. I know how to do every case (Multiplant monopoly or third degree price discrimination), ...
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### What is the difference between the demand schedule and the demand curve?

What is the difference between the demand schedule and the demand curve that a monopolist or monopsonist has? Could someone provide details for both cases or even some paradigm or a graph. I can not ...
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### What is the difference between monopoly profit and monopoly rent?

I understand that monopoly profit is the return on capital (=profit) of the monopolist, which is larger than the normal profit in a competitive market. As monopoly rent I understand the income in ...
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### What is the distributional impact of monopoly pricing on consumers?

Hi there, In the example above, a monopolist sets the price for ice-creams at Pm. The instructor then states that the rectangle B is transferred to the monopolist. What is meant by the rectangle ...
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### What are possible solutions when promoting competition is not applicable?

Usually, more competition means lower prices and higher quality as less effective businesses go out of business. However, it appears that it's not always the case. When there're a lot of health ...
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### Why is economic profit for a monopoly per unit demand minus ATC?

I understand that the P-ATC gives the per unit economic profit Why is this the case? Why wouldn't we take price minus the marginal cost?
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### Will the monopolist inevitably increase the price if demand grows?

Supposing that demand for a product in a monopolised market has grown, is it possible that equilibrium price will go down? In most cases we simply draw curves D, MR, MC and make conclusions. I ...
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### Economic Profit and the Return on Invested Capital

In my finance classes, I always learned that the a firm earning an "economic profit" is one for which its return on invested capital (ROIC) is greater than it's opportunity cost of capital (usually ...
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### Do companies have non compete agreements between each other?

Do companies also know for a better lack of words armistice? When searching for non compete agreements everything that comes up are agreements between companies and employees, but do whole companies ...
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### Is there any research, theory, or anything which shows how much of a market has to be in power of a few companies to be a force against free market?

According to Free market a free market is a system in which the prices for goods and services are determined by the open market and by consumers. In a free market, the laws and forces of supply ...
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### Value Function For Durable-Good Monopolist with General Distribution

It is known that with a unit mass of consumers, each of whom has a value distributed between 0 and 1, one can think of the monopolist solving $$\max_{p} \ p[1-F(p)]$$ when ...
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### Price discrimination question

For this question the answer is b which is the TR of group 2. If price is the same, my question is why isn't the demand function of group 1 considered? Why is the TR of group 1 omitted?
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### Are monopolies always price makers?

I have the following True/False question: A single price-taking firm on the market is called a monopoly. As far as I know, a monopoly is a price maker not a price taker. That being said if it is a ...
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### Numerical Question on a subsidized monopoly

Suppose a government agency has a monopoly in the provision of internet connections. The marginal cost of providing internet connections is $\frac12$, whereas the inverse demand function is given by: ...
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### Profit Maximisation for a Monopolist

Suppose a monopolist faces the following inverse demand function : $p = exp(-Q)$ The monopolist can produce any positive level of output with zero variable cost. Its fixed cost is $F$. Find the ...
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### 3rd Degree Price Discrimination

I came across a True/False question in my economics problem set: Is the following statement true or false? "A monopolist can practice third-degree price discrimination in the two markets it ...
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### Should Company B enter the market in the following cases

Say Company A has a monopoly producing product E, at a constant marginal cost of $3$ USD. Say the ideal number of units produced is $1$ unit which produces a profit of $2$ USD (=$P_{A}$). Next, ...
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### Why are so many pharmaceutical drugs so expensive? [closed]

In the US, the drug sofisbuvir, brand name sovaldir, and used to treat liver disease hepatitis C, was launched with a price tag of \$1000 a pill; and in the UK, the manufacturer Gilead recommended a ...