ECON104
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A fundamental source of monopoly market power arises from
barriers to entry.
A monopolist produces
less than the socially efficient quantity of output, but at a higher price than in a competitive market
A firm that is the sole seller of a product without close substitutes is
monopolistic
A monopoly firm maximizes its profit by producing Q = 500 units of output. At that level of output, its marginal revenue is $30, its average revenue is $60, and its average total cost is $34. At Q = 500, the firm's marginal cost is
$30
A monopoly firm maximizes its profit by producing Q = 500 units of output. At that level of output, its marginal revenue is $30, its average revenue is $60, and its average total cost is $34. The firm's profit-maximizing price is
$60
