In this lesson, our instructor Jibin Park gives an introduction on monopoly and public policy. He discusses monopoly vs. perfect competition, welfare effects of monopoly, public ownership of monopolies, and unregulated vs. regulated natural monopoly.
In perfect competition, total surplus is maximized since firms produce at the allocatively efficient point.
In a monopoly, total surplus is not maximized as there exists deadweight loss.
In a natural monopoly, economies of scale make it such that one firm producing will actually lower the ATC.
A monopolist, however, lacks the incentive to pass the price savings onto the consumer.
Two possible options to deal with a natural monopoly is public ownership or regulation.
Generally, a subsidy is preferable to a tax in changing a monopolist’s behavior to the socially optimal quantity.
Monopoly & Public Policy
Lecture Slides are screen-captured images of important points in the lecture. Students can download and print out these lecture slide images to do practice problems as well as take notes while watching the lecture.
This book created a 5-step plan to help you study more effectively, use your preparation time wisely, and get your best score. This book includes two full-length practice exams modeled on the real test, all the terms and concepts you need to know to get your best score, and your choice of three customized study schedules.
This book includes an in-depth preparation for both AP economics exams. It features two full-length practice tests, one in Microeconomics and one in Macroeconomics, and all test questions answered and explained. It also features a detailed review of all test topics, which include: supply and demand, theory of consumer choice, economics in the public sector, costs, perfect and imperfect competition, monopolies, labor resources, game theory, the national income and gross domestic product, inflation and unemployment, fiscal policy, money and banking, monetary policy, economic growth, international trade and exchange, interest rate determination, and the market for loanable funds.