Monopoly

LECTURE ON: (a)FEATURES OF MONOPOLY (b)PRICE AND OUTPUT DETERMINATION UNDER MONOPOLY B.TECH ECE, MANAGERIAL ECONOMICS 11-FEB, 2013

FEATURES OF MONOPOLY
Single Producer No close substitutes No difference between firm and industry No free entry

Monopolist controls only price or output

Revenue curve falls downwards from left to right

PRICE AND OUTPUT DETERMINATION UNDER MONOPOLY

Y-AXIS
MC AC
OPQM = Total Cost OSRM = Total Revenue P S Q R OPQM - OSRM PQRS = Abnormal Profits

E MR

AR

X- AXIS

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