Microeconomics
Microeconomics
5th Edition
ISBN: 9781319098780
Author: Paul Krugman, Robin Wells
Publisher: Worth Publishers
Question
Book Icon
Chapter 13, Problem aWYWL
To determine

The significance of monopoly.

Concept Introduction:

Monopoly refers to a market in which there is only a single seller of a commodity. The seller has complete control over the price of the good. The demand curve faced by a monopoly is downward sloping. This implies that the monopoly can sell more goods only by lowering the price.

Expert Solution & Answer
Check Mark

Explanation of Solution

Monopoly refers to a market in which there is only a single seller of a commodity. The seller has complete control over the price of the good. The demand curve faced by a monopoly is downward sloping. This implies that the monopoly can sell more goods only by lowering the price. A monopoly can exist for the following reasons,

  • Barrier to entry
  • Owning of scarce resources
  • Natural monopoly

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Knowledge Booster
Background pattern image
Recommended textbooks for you
Text book image
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:9780190931919
Author:NEWNAN
Publisher:Oxford University Press
Text book image
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Text book image
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Text book image
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Text book image
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Text book image
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education