Monopoly (Edexcel A-Level Economics A): Flashcards

Single seller with market power and no close substitutes

Produce where $\text{MR} = \text{MC}$

MR lies below AR

High fixed costs, low marginal costs, economies of scale

Price equals marginal cost ($P = \text{MC}$)

Less output at higher price

Welfare loss to society from restricted output

Market power, Information, Prevention of resale

Higher price to less elastic demand group

Allow supernormal profits to persist in long run