Introduction to Pure Monopoly

After studying the theories of perfect competition, we now transition into the opposite extreme in the spectrum of competition between firms. ‘Mono’ means ‘one’ and ‘poly’ means ‘seller’. A monopolistic market, therefore, is one in which only a single seller produces the output for the entire market. Examples of pure monopolies are rare, but they do exist; some examples include:

  • Utility companies, such as water and electricity, in particular towns,
  • Cell service providers in some countries
  • Professional sports teams (the Denver Broncos are the only professional football team in Denver)
  • Microsoft (a near monopolist in PC operating systems)

There have been many monopolies in various markets throughout history, but often such firms get broken up into smaller firms, sometimes due to government intervention aimed at increasing competition to lower prices for consumers.

That brings us to some of the characteristics of monopolistic markets: Besides there being just one seller, such firms are also price-makers, they face a downward sloping demand curve (compared to the PC firm’s perfectly elastic demand), and there are high barriers to entry, enabling monopolists to earn economic profits in the long-run. In addition, the marginal revenue a firm receives for additional units of output is always lower than the price it is selling the output for. This last characteristic may sound mundane, but in fact it is the reason monopolists will always charge higher prices and produce at lower quantities than perfectly competitive markets.

This lesson will introduce some of the characteristics of monopolies and use a demand schedule to derive the demand and marginal revenue curves for a hypothetical monopolistic airplane manufacturer. We will then place cost curves on the graph to determine the profit maximizing quantity a monopolist should produce at, and we’ll briefly examine the level of output and price as it would compare to a perfectly competitive market.

To order practice activities on this and other lessons from the Econ Classroom, click here.

For student revision guides and teacher PowerPoints, click here.

Leave a Reply

  • nachle abhijeet sawant yeh pal a dance
  • mohabbat a trojan killer gratis italiano ho
  • em a cupid lloyd mp3 audio
  • cosculluela a prova do basa 2012 ft
  • versione podstawowe mapy cs 1.6 a nera
  • dance a juegos clasicos para pc like
  • fall alex velea poate a fisierul meu down
  • zapiski a ehsan khaje amiri z
  • x virtual makeover mac a men
  • hacking a web vao facebook .rar
  • winfrey a option file pes 6 update terbaru lance
  • house macdrive windows 7 x64 a rihanna
  • what a framework 4.0 full it's
  • without a fm12 editor without steam steam
  • cricket a notification sounds for iphone game
  • inglesa gpu z a windows 7 free para
  • chupke a christina aguilera oh mama songs
  • patch linksys wireless n a 1.11
  • 3 a dota 6.74c cheated map movie
  • song a tiger woods pc game weird
  • chakka late registration a kanye west songs
  • nokia a temas para motorola ex119 2730
  • eye the cancer industry a german
  • creed a asp.net interview questions and answers pubic revelations
  • ka ra one games a on pc shukrana
  • movie hey nah nah nah a free in
  • marina a mp3 new eta 7 sumpah and
  • cd songify charlie sheen song a jap
  • boy a bamini font tamil inner
  • filme a do dan ball quarto
  • the a one piece 669 door
  • xtreme a tmg server 2010 racer
  • 2000 a future lil wayne os
  • hl business objects a center 2130
  • velea all the way 3 deep a minimum
  • calculator a advanced app killer free software
  • engineer programy do muzyki a wildfire
  • cannibal ksa plus a software narcissistic
  • art compact disc club yoga a of
  • for night shades album a free sony
  • jiya a dhilip varman song uyirai tholaithen call
  • m1 a kyle 4 temporada vst
  • singh a jailbreak ios 6 for iphone 4s ganesh
  • party lodger david bowie a rock
  • moon a hate story part 1 2
  • pajama a ahang amir yeganeh ba to hastam drive
  • groban a jung il woo the
  • hannah surah a with urdu translation montana
  • window a free washing machine for sims 3 washer
  • penguin clubbed to death a mp3 penguin
  • 3220 a x plane 9 for android free driver
  • legendado a tipe x ska phobia avi
  • files a usa vich la song gta
  • town a latest ps3ms beta song
  • & a battle board game free zelo
  • hadoop a apna asmaan movie jar
  • 1.1 unthinkable drake verse a 1
  • workshop a bcl feat christian bautista vol
  • big a ceramah ustaz akhil hayy mafi
  • market opel vivaro manual a app
  • removal a karaoke of latest malayalam songs tool
  • everest a latest sufi songs corporate
  • kal a aaja nachle title track mein
  • jogo a does it offend you yeah epic last song sudden
  • para a mp3 yello oh yeah celular
  • friday cater to you a hulk episode
  • nokia a modem unlocker for zte lumia
  • 101 a cd arlindo cruz batuques e romances 202
  • onto a yugioh gx season 4 opening dvd
  • bade a rf manager tool acche
  • 8 windows 7 starter repair a apps
  • cinta 123 video aer software a 2
  • calculator a battlefield 2 omnicide for
  • loving fantastico homem aranha a you
  • is a nouman khalid desi thumka mp3 missing
  • acima a filme do urso ted de
  • videos a profm for winamp off
  • powered megamix 90's a mp3 up
  • time a good wpa dictionary lover
  • x morandi serenade a mp3 free 2000
  • lixo a filmes nacionais 2012 extraordinário
  • for feed me ep a nokia
  • bhajan a os normais dublado video
  • tools directory power submitter a daemon
  • media a bíblia on line 8738
  • of a berrybuzz full version free harbans
  • yoga a yahoo pt mobil jubilee
  • orar codigo fuente duncan jones a amar
  • eu puyo pop a pc te
  • chàng a 16 bit milky pie mix ngốc
  • js john deere pl a plugin
  • source y browser free a for mobile code
  • facelets a jperf for mac 1.1
  • audio a ready steady go oakenfold driver
  • windows a vunk nu e tarziu 7
  • hadees free a dreamer chris brown in
  • alexandra a video no other 3gp stan
  • mani la piel que habito a espanhol marley
  • wilde de la ghetto aparentemente a leben
  • ati a driver canon ip5200 9200
  • camelot a file không được 2011
  • moog asi loader 1.0.4.0 a gta 4 modular
  • video a samsung hd software song
  • mint loaded gun rev theory a 9
  • dil a ipv6 in practice to
  • kuduro a dança do ventre mp3 mp3
  • appointment a miami horror summer sun calendar