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:
Lecture Videos
View Full Video
- Lecture 14: Monopoly I (00:46:58)
- Transcript (PDF)
View by Chapter
- 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
Check Yourself
Concept Quiz
This concept quiz covers key vocabulary terms and also tests your intuitive understanding of the material covered in this session. Complete this quiz before moving on to the next session to make sure you understand the concepts required to solve the mathematical and graphical problems that are the basis of this course.
Further Study
These optional resources are provided for students that wish to explore this topic more fully.
Textbook Study Materials
See the [Perloff] chapter for the topics covered, as well as quizzes, applications, and other related resources.