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Chapter 15: Monopoly (Price Discrimination (same goods but different…
Chapter 15: Monopoly
Price Discrimination
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prices discrimination requires the ability to separate customers according to their willingness to pay (geographically, income, age, etc)
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Examples: movie tickets, airline prices, store brands, quantity discounts
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Sources of Monopoly
Government- created monopolies: patent (bằng sáng chế), copyright laws, regulation (e.g: Australian Post)
Network economies (i.e: software, Internet portal, Facebook): value to customers increase in the number of customers
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Natural monopoly: economies of scale are so large that one firm can supply the entire market at a lower average total cost than can two or more firms (i.e: distribution of water - must build a network of pipes)
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Marginal Revenue < Price (because monopoly faces a downward sloping curve). MR will be negative when the price effect > output effect
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