Understanding Monopolies in a Market Economy
Learn more about the economic and financial implications of monopolies existing within any business sector.
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This course will first introduce you to the basics of a monopoly. You will look into the revenue and cost graphs for a monopoly and study total revenue, marginal revenue, and deadweight loss. You will learn that a monopoly makes a profit equal to total revenue minus total cost. When the total output is less than socially optimal, there is a deadweight loss and when the price is set above marginal cost, the firm earns a positive economic profit.
You will then learn why the slope of the marginal revenue curve for a monopolist is twice the slope of the demand curve. This course will also discuss oligopoly which is a state of limited competition, in which a market is shared by a small number of producers or sellers that dominate the market and are likely to change their prices according to their competitors. You will look into how it differs from a monopoly.
A monopoly exists when one particular business is the only supplier of a commodity or service within any particular sector of the economy, giving them significant market power and the ability to charge higher prices. By taking this economics course you will learn about the characteristics of a monopoly and when they might occur. You will also understand the economic and financial implications of a business having a monopoly in a particular commodity or service sector.
Module 1: Understanding Monopolies in a Market Economy
Review of Revenue and Cost Graphs for a Monopoly
Monopolist Optimizing Price - Total Revenue
Monopolist Optimizing Price - Marginal Revenue
Monopolist Optimizing Price - Dead Weight Loss
Optional Calculus Proof to Show that MR has Twice Slope of Demand
Oligopolies and Monopolisitc Competition
Monopolistic Competition and Economic Profit
Module 2: Monopolies in Market Economics Assessment
Learning outcomes: - Understand what a monopoly is; - Understand how a monopoly can influence a market; - Be able to explian concepts such as total revenue, marginal revenue and dead weight loss; - Compare and contrast monopolies and oligopolies.
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