Lecture Ⅹ Market Power Monopoly and Monopsony-2.pptVIP

Lecture Ⅹ Market Power: Monopoly and Monopsony 10.1 Monopoly Characteristics: 1.The sole producer of a product. So The monopolist is the market and completely controls the amount of output offered for sale. 2. However, it doesn’t mean that the monopolist can charge any price it wants to maximize profit. Average Revenue and Marginal Revenue The Monopolist’s Output Decision A Rule of Thumb for Pricing Effect of Excise Tax on Monopolist The Multi-plant Firm Step 1: Step 2： 10.2 Monopoly Power Measuring Monopoly Power Monopoly Power: The Ability to set price above marginal cost. Lerner Inde