·
Monopoly where there
single supplier in the
is a market (100 % market share
monopoly power when a single firm has 25% or more share
·
Characteristics firm controls the entire of the
one
output industry
#
·
maker
price
·
high barriers to entry
·
high sunk costs
>
-
>
legislations
-
controlofsupplychanof
a
scale
**
Abnormal
profits
Elabnormal profit
& MR
revenue is more than
covering the costs
(including opp cost)
·
.
firms will be attracted but barriers to
entry stop them
·
Mama
profit
Normal
profits
state controlled
monopoly leg post office
·
provide services (public goods)
>
-
aim to
M
Subnormal
profits
- loss
O
subsidised by
government
·
British Coal
eg
·
·
loss> fixed cost , continue to operate in the short run
Monopoly where there
single supplier in the
is a market (100 % market share
monopoly power when a single firm has 25% or more share
·
Characteristics firm controls the entire of the
one
output industry
#
·
maker
price
·
high barriers to entry
·
high sunk costs
>
-
>
legislations
-
controlofsupplychanof
a
scale
**
Abnormal
profits
Elabnormal profit
& MR
revenue is more than
covering the costs
(including opp cost)
·
.
firms will be attracted but barriers to
entry stop them
·
Mama
profit
Normal
profits
state controlled
monopoly leg post office
·
provide services (public goods)
>
-
aim to
M
Subnormal
profits
- loss
O
subsidised by
government
·
British Coal
eg
·
·
loss> fixed cost , continue to operate in the short run
