TEMPLE UNIVERSITY

Department of Economics

Microeconomics

Lecture 8

Monopoly

Andrew J. Buck

  

Directions:  Click on the "file" item at the top left of the browser window.  Click on "Save as..." from the pull down menu.   Do the necessary reading then answer the questions in the file you just saved.   When you are all done then send me your answers as email.  The best thing to do is to include the file with the questions and your embedded answers as an attachment.

NAME:_________________________

1. Which monopolist can pass on a greater share of the effluent charges levied against his output, the monopolist with the elastic or inelastic demand curve?

2. Is the size of a firm related to its being a monopoly? If not, why are we so concerned about big business?

3. Name some sources of monopoly power in addition to those cited in the text. Other than semantics, is there really a difference between a cost advantage and a barrier to entry?

4. Consider the definition of natural monopoly. Does this expand your list of firms which have monopoly power? What factors are important in making this determination?

5. Why does the marginal revenue curve lie below the demand  curve? Would the marginal revenue curve be the same as the demand curve if the monopolist could discriminate between customers? What are the necessary conditions for discrimination between customers? Can you think of examples where this sort of discrimination exists?

6. The authors make only a half-hearted attempt to think of redeeming qualities of monopolists? Can you think of additional redeeming qualities and why the monopolist should engage in these redeeming activities?

 

  

 

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