Week 5- Monopoly textbook Flashcards Preview

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Flashcards in Week 5- Monopoly textbook Deck (11):
1

Monopoly definition___

1 firm in the market. Can charge whatever place they want.

2

Barriers to entry___

legal, market forces that discourage potential competitors from entering a market.

3

Natural monopoly___

controlling a scarce physical resource.

4

Legal monopoly___

law prohibit competition.

Ex: Only US Postal Service is legally to deliver first class mail.

5

Patent gives___

inventor the exclusive legal right to make, use or sell invention.

6

Trademark is an___

identifying symbol or name for a particular good.
Ex: Chevy cars.

7

Copyright is a___

form of protection by law for original works of authorship.

8

Trade secrets___

- even if the company does not have patent or invention, firms are not allowed to steal their secrets.
Ex: formula for Cola-Cola.

9

Predatory pricing___

firm uses the threat of sharp price cuts to discourage competition.

10

Monopoly's profit and output___

Same framework as regular competitive firm.
Profit = TR – TC.

11

Inefficiency of Monopoly-

Monopoly does not supply enough output to be allocative efficient.