Monopoly I

Session Overview
In the previous lectures, we began to learn about firms' decisions in a competitive market where there are a large number of firms. However, different markets have different characteristics, and in some markets there may be only one or a few firms. In this lecture, we begin to learn about the operations of a monopoly market, where only one firm is producing a given good. The game Monopoly is named after the economic concept, in which one firm dominates an entire market. Image courtesy of William Boncher on Flickr. Keywords: Monopoly; marginal revenue; marginal cost; profit maximization; shutdown rule; market power; price discrimination.

Session Activities
Readings Before watching the lecture video, read the course textbook for an introduction to the material covered in this session:

[R&T] Chapter 10, "Monopoly." [Perloff] Chapter 11, "Monopoly." (optional)

Lecture Videos
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Lecture 14: Monopoly I (00:46:58) Transcript (PDF)

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Marginal Revenue For a Monopolistic Firm (00:15:16) Elasticity and Marginal Revenue (00:05:42) Profit Maximization and Shutdown Conditions (00:08:01) Market Power (00:04:50) Welfare Effects of Monopoly (00:06:03) Price Discriminating Firms (00:06:59)

Resources

Graphs and Figures (PDF)

Further Study
These optional resources are provided for students that wish to explore this topic more fully. Textbook Study Materials See the [Perloff] companion website for an overview of the main topics covered in the chapter, as well as quizzes, applications, and other related resources.

Chapter 11