Abstract: In the last chapter, we studied the behavior of competitive firms, that is, firms that take market prices as given and outside their control. Generally, such firms are small enough relative to their markets that their decisions have no effect on the market prices. Now we will study the polar opposite: the market in which only one firm supplies a particular good. This is called a monopoly market and the firm is a monopoly firm or monopolist. The word monopoly is from Greek, and means “one seller.” In the first part of this chapter, we analyze the classical solution to the monopoly problem. Then we consider various price discrimination techniques that monopolies can employ to increase their profits. At the end of the chapter, we look at a special market structure, called monopolistic competition, in which there are many firms producing goods that are very similar, but not identical, such as different brands of laundry detergent.
Publication Year: 2012
Publication Date: 2012-11-26
Language: en
Type: book-chapter
Indexed In: ['crossref']
Access and Citation
AI Researcher Chatbot
Get quick answers to your questions about the article from our AI researcher chatbot