100% satisfaction guarantee Immediately available after payment Both online and in PDF No strings attached
logo-home
Previously searched by you
Previously searched by you
logo
Summary: AQA A-Level Economics - 4.1.5.6 Monopoly and monopoly power £6.99
Add to cart
Quickly navigate to
Preview
  2.  
  3. AQA
  4.  
  5. Economics
  6.  
  7. 4.1.5 Market Structures

Summary

Summary: AQA A-Level Economics - 4.1.5.6 Monopoly and monopoly power
 24 views  0 purchase
  • Institution
  • AQA

A quick summary of 4.1.5.6 Monopoly and monopoly power of the AQA A Level Economics specification using the CGP guide, various websites, and class notes. • The formal diagrammatic analysis of the monopoly model. • That monopoly power is influenced by factors such as barriers to entry, the n...

[Show more]

Preview 1 out of 5  pages

Document information

  • No
  • Chapters covering market structures
  • July 29, 2022
  • 5
  • 2021/2022
  • Summary

Subjects

Connected book

book image

Book Title:

Author(s):

  • Edition:
  • ISBN:
  • Edition:

More summaries for

All for this textbook (9)

Written for

All documents for this subject (4)

Seller

avatar-seller
ruhina1

Reviews received

Content preview

4.1.5.6 Monopoly and monopoly power

A monopoly is when there is only one firm in the market. In 1985, Microsoft could have been
considered a monopoly because it was the only operating system that could be used for computers -
closest example of a pure monopoly (100% market
share) but this is very rare in real life.

A legal monopoly is one where a firm has over 25%
market share like Tesco which controls 29% of the
supermarket industry.

3 simplifying assumptions:

• Only one firm in the market

• They want to maximize profit

• There are high barriers to entry - patents



A monopolist will seek to maximise profits by setting
output where MR = MC.

This will be at output Qm and Price Pm.

Compared to a competitive market, the monopolist increases price and reduces output.

Red area = Supernormal Profit (AR-AC) * Q

Blue area = Deadweight welfare loss (combined loss of producer and consumer surplus) compared to
a competitive market.



Are monopolies efficient?

• Productively inefficient - The diagram shows that MC isn’t equal to AC at the long run
equilibrium position for a monopoly (i.e. the firm isn’t operating at the lowest point on
the AC curve). This means that a monopoly isn’t productively efficient.

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

Guaranteed quality through customer reviews

Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.

Quick and easy check-out

Quick and easy check-out

You can quickly pay through credit card for the summaries. There is no membership needed.

Focus on what matters

Focus on what matters

Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!

Frequently asked questions

What do I get when I buy this document?

You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.

Satisfaction guarantee: how does it work?

Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.

Who am I buying these notes from?

Stuvia is a marketplace, so you are not buying this document from us, but from seller ruhina1. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy these notes for £6.99. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

53068 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy revision notes and other study material for 14 years now

Start selling
£6.99
  • (0)
Add to cart
Added