Questions tagged [monopoly]

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

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13 votes
2 answers
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Monopolies are just a mathematical misunderstanding

A little head-scratcher (and a good example why we should be careful with notation). Consider a profit maximizing monopoly, that solves over price $$\max \pi = PQ(P) - C(Q(P)) \tag{1}$$ Following ...
Alecos Papadopoulos's user avatar
11 votes
3 answers
556 views

Price discrimination- how much is optimal?

I am of the understanding that as a general rule, price discrimination does not benefit consumers. Yet I can think of a situation where it does. Look at two countries, Australia and India. The price ...
Jamzy's user avatar
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7 votes
3 answers
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What are good books about monopolies and market failures?

Is there a good undergraduate level book specifically about economic monopolies and market failures?
good_one's user avatar
7 votes
4 answers
1k views

Can destruction be profitable?

We often see news that some company destroys items they couldn't sell in time. Also we can see news of supermarkets destroying food just because it's not fresh although it's perfectly edible. If ...
Calmarius's user avatar
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6 votes
2 answers
119 views

Modelling Pay what you want

I have been trying to model a Pay What you Want scheme. Now, for a monopoly it is clear that monopoly will have more profit by setting monopoly pricing assuming all players are selfish. But consider a ...
Arcapol's user avatar
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4 votes
1 answer
376 views

Can marginal revenue be increasing?

As per my calculations, the derivative of the MR curve is given by: $MR'(q)=2p'(q)+qp''(q)$, where $p(q)$ is the inverse demand curve. Therefore,for a downward sloping demand curve, if the second ...
Student's user avatar
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3 votes
2 answers
32k views

Why is the Marginal Cost (MC) of a monopoly horizontal

I presume it's because they're price makers, but this doesn't really answer much. Furethermore, in a monopoly is it Marginal Cost or Long run marginal cost that's horizontal?
tsp216's user avatar
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3 votes
2 answers
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What are examples of natural monopolies that don't have overwhelming economies of scale?

On wikipedia, I read that the currently-used formal definition of a natural monopoly is where “[a]n industry in which multi-firm production is more costly than production by a monopoly”. I tried ...
B T's user avatar
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1 vote
1 answer
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Will there be any competition amongst cement retailers?

If we consider a cement manufaturer in a given country, say India, then will the cement retailers of that companies' product compete with each other? And if so, then what kind of a competition will it ...
Student's user avatar
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-4 votes
2 answers
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Is there a qualitative difference between the rent derived from a supply fixed by nature and single supplier required to supply a fixed quantity?

The assumption are that supply is absolutely and permanently fixed at q average and marginal costs are zero demand always exceeds supply (P ≥ 0) The graph should look the same in both cases: a ...
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