Review Notes - Market Structure: Monopoly

- Characteristics of monopoly market

- may be many buyers but only one seller

- single firm is the market

- homogeneous product

- entry barriers

- What is firm D in a monopoly market? Market Demand?

- What is MR in a monopoly market assuming that the firm cannot price discriminate?

- profit maximization graphically (see figure to the right). Be prepared to find profit maximizing q and p, profit, TR, TC, TVC, TFC, AFC, AVC, ATC.

- the long-run in monopoly markets.

- the crucial characteristic = entry barriers => profit can be > 0 in the long-run. Examples of entry barriers?

- Natural Monopoly

- Legal and Illegal barriers

- Are monopoly markets efficient?

- Technological efficiency (both firm and industry)?

- Allocative efficiency?