Review of Topics: Economics 101, Part 4

Chapters 14, 15

Monopoly

• Monopoly profit maximizing price and output: MR=MC
• Marginal revenue versus price
• Price versus marginal cost
• Monopoly profit in the short and long run
• Barriers to entry
• Natural monopoly
• Local Monopoly
• Government Sponsored monopoly
• Consumer and producer surplus in monopoly settings
• Regulation: benefits and problems
• Government ownership of monopoly

Market Structure

• Four-Firm Concentration ratio
• Herfindahl-Hirschman Index
• Lessons from the in-class companies:

1. compensation,

2. free riders,

3. effort,

4. role of competition,

5. expected returns

Oligopoly

• Collusion
• Cartels
• Incentives to Cheat
• Regulation