Monopolists of the world

What is a monopoly?A monopoly is the sole supplier of a product

Least competitive market structure

The monopolist’s are the price setters

High barriers of entry

Sloping demand curve

Famous board game

Advantages and disadvantages of monopolies

Advantages Disadvantages

Supernormal profits gives monopolists funds for research and development

Supernormal profits is a disincentive to be more efficient to develop new products

Monopoly power means the firms will have financial power to match large overseas competitors

Monopolists do not produce at the most productively efficient point of output (i.e. at the lowest point of the average cost curve)

Economies of scale. Increased output will lead to a decrease in average costs ofproduction. These can be passed on to consumers in the form of lowerprices.

Monopolists may undertake price discrimination to raise producer surplus and reduce consumer surplus

Examples of monopolies

The Justice Department and the states believe that Microsoft has used its monopoly in operating system software to protect its dominance and eliminate competitors.

The government says that in the long run, consumers will be harmed, because there will be less competition and fewer choices. 

 In March 2004 the European Union brought antitrust legal action against the company, citing it abused its dominance with the Windows OS, resulting in a judgment of €497 million ($613 million) and to produce new versions of Windows XP without Windows Media Player, Windows XP Home Edition N and Windows XP Professional N

Which of the following is a characteristic of pure monopoly?

(A)  one firm, complete market power.

(B)  low barriers to entry.

(C)  the absence of market power.

(D)  firm acts as a price taker.

How many games of Monopoly have been sold worldwide?A) 350 Million

B) 215 Million

C) 278 Million

D) 179 Million

How long was the longest game of monopoly A) 70 days

B) One year

C) 38 days

D) 3 days