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Chapter 8

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9 views4 pages

Slide 1: Pure Monopoly Vs Perfect Competition P P Q 0

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Pure Monopoly vs

Perfect Competition

Chapter 8
slide 1
QM < QC

PM > PC

Price

>

=0

Industry
Demand

PM
MR

PC
QM

QC

Unit Cost

Output

PURE MONOPOLY

8.2

Examples:
Entry Barriers:
Price and Output are
determined by MR = MC.
Industry
Demand

MC

AC

PM
MR = MC

QM

Output

NATURAL MONOPOLY

8.3

Unregulated Pricing: QM , PM
Average-Cost Pricing: QR , PR
Declining
AC

Electricity
Demand

PM
PR

Marginal-Cost Pricing
MR

MC
QM

QR

Output

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